Table of Contents
Introduction
By Sandy Kaur
A lasting power of attorney (LPA) is a way of giving someone you trust (your attorney), the legal authority to make decisions on your behalf if you lose the mental capacity to do so in the future, or if you no longer want to make decisions for yourself.
There are two types of LPA:
LPA for financial decisions
LPA for health and care decisions
LPA for financial decisions
An LPA for financial decisions can be used while you still have mental capacity or you can state that you only want it to come into force if you lose capacity. An LPA for financial decisions can cover things such as:
buying and selling property
paying the mortgage
investing money
paying bills
arranging repairs to property.
You can restrict the types of decisions your attorney can make, or let them make all decisions on your behalf.
If you’re setting up an LPA for financial decisions, your attorney must keep accounts and make sure their money is kept separate from yours. You can ask for regular details of how much is spent and how much money you have. These details can be sent to your solicitor or a family member if you lose mental capacity. This offers an extra layer of protection.
LPA for health and care decisions
This covers health and care decisions and can only be used once you have lost mental capacity. An attorney can generally make decisions about things such as:
where you should live
your medical care
what you should eat
who you should have contact with
what kind of social activities you should take part in.
You can also give special permission for your attorney to make decisions about life-saving treatment.
Do I need to register a Lasting Power of Attorney?
In order for a Lasting Power of Attorney (LPA) to be valid and used by the Attorney it must be registered with the Office of the Public Guardian. When a Property and Affairs LPA has been registered it can be used straight away. With a Health and Welfare LPA, it can only be used when it is registered and the Donor has lost their mental capacity to make decisions.
You may prefer to delay registration until the LPA is actually needed. However, it is often best to register the LPA as soon as possible so as to avoid delays, as it can take 3 -4 months for it to be registered depending upon Office of the Public Guardian backlogs and delays. A minimum period of 6 weeks is required to allow the people who the Donor has chosen to be notified (if applicable) to have the chance to raise any objections to.
Also, registering earlier means that any mistakes or errors can be identified and corrected. If there is a delay in registering and it is found that there are errors then the Donor may no longer have the mental capacity to make a new LPA.
What are the risks of not making a LPA?
Should you not have an LPA in place and you become unable to manage your own affairs your loved ones may need to make an application to the Court of Protection to manage your affairs.
Court of Protection applications can take up to 10 months to complete by which time your affairs could be significantly damaged and the process is far more costly than an LPA. Furthermore the person chosen to deal with your affairs may not be the person you would have chosen and it may even be a court official who can and will charge every time they act for you.
It is a common misconception that people can make a LPA when the time comes, however it is important to note that in order to make a LPA you need to have the mental capacity to understand the formalities and consequences of making one.
Attorneys will be able to act on your behalf once the LPA is registered. However if you do not want this then an LPA can be drafted to only come into force if and when it is needed and can be as wide or as restrictive as you wish. You also have the option to defer registration of the LPA until it is required, this can then be registered either by you or by your Attorney(s) on your behalf, please be aware that registration can take approximately 6 to 9 weeks to complete.
What are the fees for LPA’s?
In order for the LPA to take effect, it must be registered and there is also a Court registration fee of £82.00 per LPA.
The applicant will not have to pay any fees if they are in receipt of any of the following benefits:
Income Support
Income Based Employment and Support Allowance
Income Based Job Seekers Allowance
Pension Guarantee Credit
Working Tax Credit and Child Tax Credit/Severe Disability Element
Housing Benefit or Council Tax Benefit.
Fee Reductions
If the applicant is on a low income, on state benefits or has a low capital and savings then they may be eligible to pay a reduced fee. If the applicants gross annual income is less than £12,000, then the applicant will only have to pay 50% of the fee.
If a fee exemption or fee remission is claimed then it is necessary to provide evidence which is less than 3 months old in support such as a letter or other document clearly showing the benefit that the applicant is receiving.
In order to claim a Fee Exemption or Fee Remission then it will be necessary to complete a Fee Exemption/Remission Form called an LPA 120.
No refunds are usually given even if the application is rejected or if the applicant or their Attorney passes away before the registration is complete. If the application is corrected, and not rejected, then there should not be a need to pay an additional fee. If you would like more details on whether you are eligible for a fee reduction or are just interested in finding out more about registering an LPA, you can reach me via Lawhive
Sandy has a LLB Honours Degree in Law from the University of Leicester and completed the Legal Practice Course gaining a commendation in Administration of Estates. She runs a team of solicitors focused on Private Client that take an active interest in the issues faced by families upon the death of a loved one and continually explore the developments and challenges in the Private Client field.