Any adult in the UK is entitled to avail of a Lasting Power of Attorney (LPA), a document granting decision-making authority to one or more attorneys when the person lacks the mental capacity to decide for themselves at a later stage in life. LPAs are divided into two categories – health & welfare, and property & financial affairs – and they differ from other powers of attorney as they remain effective after the donor has lost his/her mental capacity.
A property & financial affairs LPA grants attorneys the autonomy to make decisions on a donor’s behalf regarding his/her property and finances, including the payment of bills, the management of bank or building society accounts and the possible sale of the donor’s property. This type of LPA can be used irrespective of whether the donor has lost his/her mental capacity.
Any person wishing to apply for an LPA must submit his/her application to the Office of the Public Guardian (OPG) through Form LP1F, the document pertaining to property & financial affairs LPAs. The application then needs to be certified by a suitable certificate provider (e.g. a solicitor) and registered with the OPG. A property & financial affairs LPA will take effect immediately if the donor has stipulated that his/her attorney has the authority to make decisions once the LPA is registered.
The decision-making power of attorneys is dependent upon the powers granted to them by the donor in the LPA. In terms of property and finances, common decisions entrusted to attorneys include:
- Opening, closing and using the donor’s bank or building society accounts
- Paying rent, mortgages and utility bills on the donor’s behalf
- Claiming, receiving and using benefits or allowances on the donor’s behalf
- Buying or selling the donor’s home
Before entering an LPA, a donor should be fully aware of the definition of the term ‘mental capacity’, in this case his/her ability to make a certain decision regarding property or finances at the time that it needs to be made. A person does not possess mental capacity if he/she fails to understand the decision that is to be made, why it needs to be made and/or the probable implications of that decision, or if he/she unable to communicate such decisions in any form.
Any person entering an LPA is well advised to select their attorneys with extreme care. Attorneys must be at least 18 years of age and should be reliable, trustworthy people who will act in the best interests of the donor. They cannot be on the Disclosure and Barring Services List, nor can they be bankrupt or have a debt relief order.
A donor may choose multiple attorneys if he/she wishes, but should only do so if he/she is highly confident that all appointed attorneys can work together amicably, as certain decisions may require total collaboration (known as ‘working jointly’). Unless donors specify that decisions can be made ‘jointly and severally’, namely that they can be made individually as well as collectively, the authorities will assume that they shall act jointly. Also, the more attorneys that a donor appoints, the less likely it is that they will reach consensus on important decisions, so this is worth considering before selecting your attorneys.
Any affairs relating to LPAs, such as the nature of decisions that can be made and who shall be granted the authority to make them, require great care and attention, so it is worth taking some time to think comprehensively about these matters. They might not be the easiest life decisions to make, but there is no rush and it is worth taking time to consider them fully prior to formally putting them into writing, and while you still retain the mental capacity to competently judge who would be best entrusted with such affairs after your mental capacity has elapsed.
Article Courtesy of: Rizwan Rashid, an Islamic Wills and Lasting Powers of Attorney specialist with I Will Solicitors http://www.iwillsolicitors.com/our-services/powers-of-attorney/