Misconceptions about Lasting Powers of Attorney

A recent survey carried out by Which? has revealed that, although most of the public understand what a Lasting Power of Attorney is, there is some confusion as to how the documents operate.

A Lasting Power of Attorney (LPA) is a document that allows a person, called the Donor, to appoint a person or persons (Attorneys) to stand in their shoes when making decisions relating to their finances and health.  I have seen for myself there is a common misconception that if a person has a Will, there is no reason to worry about a Power of Attorney; this is not the case.  A Will only takes effect on one’s death, whereas an LPA will provide support for a person who is still alive but has become physically or mentally incapable.

The powers under an LPA can only be granted by a person who has the mental capacity to make their own decisions, and as such, the Donor may have to consider preparing an LPA before it is needed, as it could be too late to do so afterwards.  If a person has already lost the capacity to make their own decisions, the only option will be to make an application to the Court of Protection to be a Deputy; this process is considerably lengthier and more expensive than the process for preparing an LPA.

An LPA must be registered before it can used.  16% of those surveyed by Which? believed that once this registration has taken place, the Donor will lose access to their assets, but this is also not the case.  Registration of an LPA does not raise any presumption that the Donor has lost capacity, and in fact, as the registration process can take several months, it is usually wise to register the LPA early to ensure that it is available should it need to be used. There are two types of LPA.  The first is for Property and Financial Affairs, and deals with all financial matters such as accessing bank accounts and settling invoices.   When completing a Property and Financial Affairs LPA the Donor has the option to decide when their attorneys can step into their shoes or choose to wait until they have lost capacity. The latter option requires evidence from a professional that capacity has been lost and therefore can involve additional expense and take longer to organise which is an important issue if the Donor has bills to pay such as care home fees.

The second is for Health and Welfare, and deals with matters such as where a person lives, medical decisions and life sustaining treatment.  The welfare LPA can only used if the Donor has become mentally incapable.

There are several options as to how Attorneys can be appointed, and a Donor must give this careful consideration.  For example, primary Attorneys can be appointed, with replacements to act if those named first are unable or unwilling to fulfil their duties.  And where multiple Attorneys are appointed, they may act jointly, so they must make every decision together, jointly and severally so that they can act independently of one another or jointly in some respects and jointly in severally in others.

An LPA is a powerful instrument, and it is important that the public are aware of the options available to them should they be concerned about the management of their affairs; particularly that the document must be prepared before it is needed!

Please call us on 020 8464 4242 if you would like advice on preparing a Lasting Power of Attorney.