Setting up a “lasting power of attorney”, or LPA, is a very wise precaution to take, especially if you have a health condition that is likely to deteriorate over time. In simple terms, setting this up allows you to pass control of your affairs to a chosen person;
– such as a spouse, child, family member or trusted close friend
– in the event that you become seriously ill or are involved in an accident and you’re no longer able to manage your affairs yourself.

In England and Wales there are two separate types of LPA:

  1. a Property and Financial Affairs LPA
  2. a Health and Welfare LPA.

The first one allows the person you choose – your “attorney” – to make decisions on your behalf regarding your money, bank accounts, investments, property and so on. The second allows them to make decisions about your health, including what type of treatment you receive and potentially decisions about end-of-life care.

These are two separate documents, and you can choose to have either or both. In England and Wales, the two LPAs have replaced the single Enduring Power of Attorney (EPA). However, EPAs that were made and signed before 1 October 2007 can still be used.

Lasting Power of Attorney (LPA). This is a legal agreement that enables you to appoint someone you trust to make decisions on your behalf if you can’t make them yourself.

The government is currently looking at upgrading the system for people to register an LPA to make the process easier and more streamlined, and is consulting on how best to do this.

According to research by “Which?”there is widespread confusion about LPAs, with 16% of people questioned by the consumer association saying they thought that they would lose access to their financial accounts as soon as an LPA is registered. Having an LPA does not mean you hand over control of your affairs
– this will only happen if a time comes when decisions need to be made on your behalf.

Give yourself peace of mind that you’ll have control over what happens to your money and property when you die.
A legally-binding will can ensure your wishes are followed and avoid complications for your loved ones at a very difficult time.

An LPA is designed to allow you to pass control of your affairs to another person, usually your spouse, child or another family member or close friend, in the event that you become seriously ill or are involved in an accident which results in you losing your mental capacity.
In legal speak, when an LPA is drafted, the person who sets one up (i.e. you) is known as the ‘donor’ while the person you want to manage your affairs is known as your ‘attorney’.

There are two different types of LPA:

  • The first is a Property & Financial Affairs LPA. This allows someone to manage your financial affairs on your behalf, from your bank accounts, investments and taxes, to paying your bills and even selling your home.
  • The second is a Health and Welfare LPA. This lets your attorney take control of decisions regarding your health, so for example they might decide when you need to move into care, or what medical treatments you receive. This may include decisions about end-of-life care or whether or not to resuscitate.

These are two separate documents, so you can choose to have either or both. In England and Wales, the two LPAs have replaced the single Enduring Power of Attorney (EPA). However, EPAs that were made and signed before 1 October 2007 can still be used.

Who can set up a Lasting Power of Attorney?

Anyone over 18 can set up an LPA. You don’t have to be in ill health to do so but you must be of sound mind when you set it up as you cannot make an LPA after you have lost your mental capacity.
As it’s impossible to foresee illness or accidents, it makes sense for everyone to consider putting an LPA in place. There is obviously a more pressing need for anyone who has already been diagnosed with an illness, such as dementia, which could affect their mental capacity in future.

“Many people do not realise that without a lasting power of attorney, nobody has the legal authority to manage their financial affairs and welfare, if they become unable to do so.”
“Unfortunately, anyone can be impacted by an accident or illness at any time, so putting it in place is not really about how old you are, it’s more about just being smart and on the ball.”

Who can be an attorney and what can they control?

Your chosen attorney must be at least 18 years of age and be of sound mind. You can appoint more than one attorney to act on your behalf if you want to, so people with two or more children often decide to give both or all of their children power of attorney.

If you do this, you must clarify if they will make decisions jointly or separately. If they must make them together, or ‘jointly’, then all attorneys must be in agreement when a decision is made. You can choose for just big decisions to be made jointly if you want to, such as perhaps the sale of your home, while others can be made individually.

There is also the option to impose restrictions on your attorneys, so you might want them to make decisions on some things but not others, or you can leave instructions and preferences for your attorneys to direct and guide the way they act.

For example, you might include a command for them not to move you into residential care unless your doctor says that you can no longer live independently. Any instructions you make must be clear and practical, otherwise they can be rejected.

How do I set up an Lasting Power of Attorney?

You can download LPA forms from this link Gov.uk or 👇🏼
https://www.gov.uk/government/publications/make-a-lasting-power-of-attorney

if you live in England or Wales:

  • All forms will need to be signed and witnessed by your attorneys and witnesses in a strict order before you submit them.The donor must sign first, followed by the certificate provider, the attorney(s), threplacement attorney(s) and lastly the person registering the application which could be the donor or the attorney.
  • The ‘certificate provider’ is usually either a solicitor or a person who has known you for more than two years and can confirm that you understand what you’re doing. The names, addresses and dates of birth of the attorneys and donor must all be included in full.
  • The person who witnesses your signature must be over the age of 18 and cannot be one of your attorneys or replacement attorneys. Your certificate provider can act as your witness if necessary.
  • Your witness can be anyone over 18 who is not an attorney or replacement attorney, so could be a neighbour or friend who lives nearby. The attorney’s witness can be anyone over 18 but must not be the donor.

Once your application is completed, you’ll need to register it with the Office for the Public Guardian (OPG). You can find their contact details here or https://www.gov.uk/power-of-attorney/register. 

An LPA must be registered before it can be used and registration usually takes an average of 8 to 10 weeks, provided there are no objections or mistakes on the forms. It is therefore advisable to register your LPA before it is needed so that it is ready to be used immediately.

Bear in mind that even if you make and register a LPA, that does not mean you are automatically handing over control of your financial affairs.

A property and financial affairs LPA can be used at any time once it has been registered (even whilst the donor still has capacity), but only with the consent of the donor, whereas a health and welfare LPA can only be used when the donor has lost capacity (even when it has been registered).

In addition, provided you still have the mental capacity to do so, you can cancel an LPA at any time, by drawing up a written statement entitled a ‘deed of revocation’.

How much does it cost to set up a Lasting Power of Attorney?

Unless you use a solicitor, it is free to prepare an LPA. But while there are no costs for preparing an LPA, there is a fee for registering it. The registration fees in England and Wales are currently £82 for each LPA, so if you’re registering both an LPA for property and financial affairs and one for health and welfare, it will set you back £164. If your income is less than £12,000 a year, you may be eligible for a fee reduction, which brings the cost down to £41.

If you receive any of the following means-tested benefits you can also apply for a fees exemption, or your attorney or solicitor can do so on your behalf:

  • Income Support
  • Income-based Employment and Support Allowance
  • Income-based Jobseeker’s Allowance
  • Guarantee Credit element of State Pension Credit
  • Housing Benefit
  • Council Tax Reduction/Support
  • Local Housing Allowance

A combination of Working Tax Credit and at least one of: Child Tax Credit, Disability Element of Working Tax Credit, Severe Disability Element of Working Tax Credit.

Remember…

An LPA is an important document and unless you follow the correct process when setting one up, there’s a risk your application might not be accepted. Although you don’t have to use a solicitor to set one up, it may be worth your while seeking help from one to ensure yours is registered properly.