What is a Lasting Power of Attorney?
A Lasting Power of Attorney is a legal document that lets you, as the donor, appoint one or more people, the attorney(s), to help you make decisions or to make decisions on your behalf.
This gives you more control over what happens to you if you have an accident or suffer an illness and cannot make your own decisions, i.e. you lack mental capacity.
When someone loses the ability to manage their own affairs, their attorney has the authority to step in and deal with matters for them once they have registered the Lasting Power of Attorney with the Office of the Public Guardian.
If you have been appointed as someone’s attorney under a Lasting Power of Attorney you will have the authority to make certain decisions on their behalf.
The type of Lasting Powers of Attorney There are two types of Lasting Power of Attorney – one in respect of property and financial affairs and one in respect of health and welfare.
Property and Financial
A property and financial affairs attorney is generally responsible for dealing with all of the donor’s financial matters, including:
Managing bank accounts and investments
Paying bills, to include tax liabilities
Claiming benefits
Home repairs and maintenance
Renting out property
Buying items on behalf of the donor
There are rules in respect of some transactions, such as the giving of gifts. Only gifts of a reasonable value can be given and these should be in accordance with what the donor can afford and take into account issues such as whether they gave similar gifts while they still had mental capacity.
A property and financial affairs Lasting Power of Attorney can be used while the donor still has capacity, for example, if they need help because of mobility issues.
The donor may have included some restrictions on the Lasting Power of Attorney, for example, in respect of the sale of their property. In any event, it can be advisable to seek consent from the Court of Protection before selling someone’s home on their behalf. You will also need consent if you wish to deal with tax planning for the donor.
An attorney cannot profit from their role, nor can they purchase anything from the donor at below market rate without the authority of the Court of Protection.
Health and Welfare
A health and welfare Lasting Power of Attorney can only be used when the donor has lost the ability to make their own decisions.
Unless the document contains any restrictions to the contrary, the attorney can deal with the following issues:
Where the donor will live
Who they will see
What their day-to-day routine will look like
What personal care they will receive
What medical treatments they will have
Refusal of life-sustaining treatment
You are required to act in the best interests of the donor in making decisions for them and to consider what they would want if they were able to communicate this themselves.
An attorney should not make assumptions based on the donor’s age, appearance or condition, nor can the donor’s freedom be restricted.
Conclusion
Lasting Powers of Attorney are so important and there can be dire consequences in the event that you do not prepare Lasting Powers of Attorney. There is no such thing as being too young or too old, or whether you a single, in a relationship or married.
A recent example is TV personality Kate Garraway’s publicised financial and emotional woes following on from her husband being in a coma in the hospital due to Covid-19.
Although we are talking about a married couple here, this does not dominate the fact that certain bills, policies and accounts are in the husband’s name.
Kate Garraway says:
“One of the practical problems – which a lot of people would’ve experienced if they’ve got the absence of someone in their life – like many things the car is entirely in Derek’s name, the insurance in Derek’s name, a lot of our bank account.
There are a lot of financial outgoings that I’ve talked about… which is making life very complicated because I can’t get access to things… because legally I haven’t got power of attorney.”
Whilst it is important to prepare a Will, it is equally as important to prepare an LPA, for both health & welfare and property & financial affairs.
The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.
Please feel free to contact me on 0207 183 4595 or at emma.aslett@pennchambers.co.uk
0207 183 4595