Yesterday afternoon I gave a talk to a local U3A group on the subject of care fees planning.
It’s a wide-ranging and quite technical subject, so compressing an overview into a couple of hours is always quite challenging.
Answering questions from the audience during and after my presentation, it was clear that Lasting Powers of Attorney are a hot topic.
For those who are unfamiliar with the concept, a Lasting Power of Attorney is a legal document that lets you (the ‘donor’) appoint people (known as ‘attorneys’) to make decisions on your behalf.
It comes in two types; a health and welfare Lasting Power of Attorney – which allows your attorney to make decisions about things like your daily routine and medical care – and a property and financial affairs Lasting Power of Attorney – which lets you attorney manage your financial affairs, pay bills and collect state benefits.
Once you choose a suitable attorney who you are confident can manage your affairs, you fill in certain forms to create the Lasting Power of Attorney or alternatively speak to a solicitor who will draw it up on your behalf.
The Lasting Power of Attorney then needs to be registered with the Office of the Public Guardian before your attorney can start making decisions on your behalf.
This can happen straight away, but typically you will wait until you lose mental capacity.
The registration process can take up to eight weeks and, when drawing up your Lasting Power of Attorney, you can select people who must be notified when the document is registered.
As a donor, you can object to your Lasting Power of Attorney being registered for any reason. You don’t need factual grounds to object.
Prior to the Lasting Power of Attorney, the Enduring Power of Attorney (EPA) was a similar document. It was available in England and Wales, and remains valid as long as it was signed before 1st October 2007.
Unlike a Lasting Power of Attorney, an Enduring Power of Attorney can only be registered if the donor is losing, or has lost, their mental capacity. It must be registered by the attorney.
This registration process is the main difference between the old Enduring Power of Attorney and newer Lasting Power of Attorney.
Attorneys acting under either document must follow the Mental Capacity Act Code of Practice, designed to protect vulnerable people.
Mental Capacity Act Code of Practice
As a result, attorneys have only very limited powers to make gifts of loans from the assets they manage on behalf of the donor. They can apply to the Court of Protection to make large gifts or execute a statutory will, but can only make modest seasonal gifts without prior authority from the court.
Having in place a Power of Attorney is an important consideration, particularly for older people who risk putting their relatives through a time consuming and costly process in the event they lose their mental capacity at some point and are unable to manage their own affairs.
If you would like to speak to a local solicitor with expertise in this area, please get in touch and we will be happy to introduce you to the right individual.
