Lasting Power of Attorney
We all know that we should write a will, but too few of us know we should also consider something called lasting power of attorney.
A lasting power of attorney (LPA) gives another individual the legal authority to look after specific aspects of your financial affairs or health and welfare should you lose the capacity to do so. It's not just for the elderly; younger people may become incapacitated through accident or illness. In addition, you may be incapacitated overseas and need something done by your attorney in the UK.
If you do not have an LPA in place and later become mentally incapacitated, relatives may face long delays and expense in applying to the court of protection to get access and take control of your assets and finances.
LPAs are designed to be recognised by financial institutions, care homes and local authorities, as well as tax, benefits and pension authorities. They are legal documents that can be set up relatively cheaply, with or without the help of a solicitor. You may consider having one alongside your will.
Types of LPA
There are two types of LPA: one that can cover decisions about money matters, known as a property & financial affairs LPA, and one that can cover decisions about healthcare, known as a health & welfare LPA. A key difference is that a property and financial affairs LPA can be used while someone still has capacity, whereas a health & welfare LPA can only be used once they have lost mental capacity.
A person administering a property and financial affairs LPA can make decision on things such as buying and selling your property, dealing with your bills, running your bank accounts and investing your money. If they have a health & welfare LPA, they can generally make decisions about where you should live, how you should be treated medically, what you should eat and who you should have contact with.
Do I Need a Solicitor To Do My LPA?
You do not need a solicitor to do your LPA. It can be done online via the Court of Protection website or you can use AMIFA Limited to do it on your behalf. We can make home visits and are often quicker and cheaper than solicitors.
How Much Does It Cost?
The Office of the Public Guardian (OPG) charges a fee of £82 per LPA so for both LPA’s it would be £164, however, you may be entitled to exemption, if on certain benefits or remission, a 50% reduction if your income is below £12,000.
In addition, there are additional fees for using a third party like AMIFA Limited or a solicitor to complete your application.
AMIFA Limited charge £250 per LPA or £350 for both LPA’s. If a couple are having both then there are further discounts available.
Who Can Be My Attorney
You can choose anyone you trust as your attorney, provided they are over 18, not bankrupt and they are willing to take on the role, which is a serious responsibility. It’s their duty to make all decisions in your best interests and they must follow certain rules and principles set out in the Mental Capacity Act aimed at making sure you are encouraged to make your own decisions where possible. As a donor, you can restrict or specify the types of decisions the attorney can make or you can allow them to make all decisions on your behalf.
To protect your interests, an LPA must be signed by a certificate provider – someone else of your choosing, it doesn’t have to be a solicitor – who certifies that you understand the LPA and have not been pressurised into signing it. You could choose close friends or relatives (other than your chosen attorneys) who must be formally told that you are setting up an LPA and given the opportunity to raise any concerns.
LPA's and Joint Bank Accounts
THIS IS INCORRECT!
The British Bankers' Association guidance states that when dealing with a joint bank account where one party has lost capacity the bank can decide whether to temporarily restrict the account, unless/until there is Power of Attorney or deputyship in place.
Individual institutions COULD freeze an account which would be very inconvenient to say the least.
WHY RISK THE POSSIBILITY?
Our advice (and that of the British Bankers' Association) has always been to establish a Power of Attorney before someone loses capacity so they are never put in a position where they cannot access their funds.
See below for a link to the BBA's guidance leaflet. Please see page 9 under the heading "Dealing with a joint bank account".