The statistics are frightening. One person in the UK develops dementia every three minutes, and yet relatives can’t just walk into a bank and access their money, even if it is to pay for their care. Think too of the thousands of people who unexpectedly have a stroke or serious accident, leaving them suddenly incapable of looking after their affairs.
You may have heard of a Lasting Power of Attorney. Without this document, loved ones have to apply through the courts for the right to manage the financial affairs of the person who has lost mental capacity. This can be a long and costly process, so it is important to get it sorted while they still have all their faculties.
 What is a Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal document which allows you to appoint someone to make decisions for you if you lose mental capacity in the future.
By planning ahead, you can take control and choose who you trust to make important decisions about your health, care and finances on your behalf.
You can appoint as many Attorneys as you wish but for practical reasons, we would not recommend more than four.
It doesn’t mean you suddenly lose all control
A key point to remember when considering sorting a Lasting Power of Attorney for someone else to look after your affairs should you become incapacitated is that your Attorney would only ever make a choice for you if you were unable to make that specific decision at the time it needs to be made. For example, if you were to fall into a coma, they would start looking after your affairs, but if you were to wake from the coma and were able to start making your own decisions again, you could.
What types of LPA are there?
There are two types, one for financial decisions and one for health and care. These are separate documents and you can decide to appoint different Attorneys in each document. You can also appoint Replacement Attorneys to step in if your first choice of Attorney is no longer able to act for you.
As well as being useful for those who lose mental capacity, a financial Lasting Power of Attorney also allows you to appoint someone to act on your behalf if you are (or become) physically unable to deal with your property and financial affairs. In this scenario, you would still remain in control of the decision making.
 When should I prepare an LPA?
An LPA should be prepared when you are fit and well and able to plan for the future. Once your LPA has been signed by you and your Attorneys, it should be sent to the Office of the Public Guardian for validation.
The LPA for financial decisions replaced the old Enduring Power of Attorney (EPA). Any existing EPAs remain valid legal documents, but you may want to consider preparing a new LPA to allow you to appoint Replacement Attorneys.
While it was not necessary to register an EPA once it was put in place, Attorneys are under a duty to register an EPA if they believe the person for whom they are appointed has either lost or is beginning to lose mental capacity. An LPA (or EPA) can be revoked at any time unless you have lost mental capacity.
How much does an LPA cost?
The Office of the Public Guardian charge a fee of £82 for each separate document and their validation process takes approximately 8 to 10 weeks. If you earn less than £12,000 a year, you may be entitled to a reduced fee. We would advise you to use a solicitor so you’ll also have to pay their legal fees.
How old should I be to make an LPA?
There is no specific age when you should consider making a Power of Attorney. Younger people can obviously lose capacity through accidents but it is more common as people get older. If you or a close family member or friend is diagnosed with a condition that is likely to cause loss of capacity, it would be sensible to think about who you want to make decisions for you when you can no longer do so.
Who decides if a person has mental capacity?
The Mental Capacity Act 2005 says that a person is unable to make a decision if they can’t do one of the following:
- Understand information relevant to a decision
- Retain that information long enough to make the decision
- Use or weigh up that information, or
- Communicate the decision
When you make an LPA, a ‘certificate provider’ decides if you’re capable of making that choice. This can be someone you’ve known for two years or someone with relevant professional skills, such as a doctor, lawyer or social worker.
Business Owners
Business owners should also consider putting in place a separate LPA for financial decisions to appoint Attorneys in relation to their business affairs. Consideration must be given to the business’ own separate legal documentation, for example, your Partnership Agreement or your company’s Articles of Association, which may need to be amended to allow an Attorney to act in relation to the business if necessary.
Next steps
The LPA is a powerful legal document. If you’re at all unsure about the process or want advice on why or how to set one up, it is worth seeking legal help.
At Harding Evans, our team of friendly, sympathetic expert lawyers have years of experience in dealing with LPAs and can help guide you through the process. Contact our expert team via email hello@hevans.com or call 01633 244233 for our Newport office or 029 2267 6818 for our Cardiff office.
