A Power of Attorney is a legal document which delegates authority to individuals known as attorneys to make decisions on your behalf.
What are the types of Power of Attorney?
There are three main types of Power of Attorney which can be granted in England and Wales.
- General Power of Attorney (GPA)
These are documents that authorise an attorney to deal with either all your property and financial matters, or more usually a specific transaction or matter, on your behalf. A GPA is usually used in transactions where you are not able to be physically present to sign documents. It cannot be used if you lose mental capacity.
- Enduring Power of Attorney (EPA)
It is no longer possible to make an EPA, however any EPAs that were correctly made before 1 October 2007 are still valid. An EPA gives the attorneys authority to manage your property and financial affairs and will continue to work after you lose mental capacity.
- Lasting Power of Attorney (LPA)
LPAs have replaced EPAs since 1 October 2007. There are two different types which allow you to appoint attorneys to either manage your property and financial affairs or your health and welfare. LPAs continue to work after you lose mental capacity.
What does an LPA allow attorneys to do?
LPAs for Health and Welfare (LPA HW) allow your attorneys to make decisions about your health and welfare which might include decisions about your daily routine, medical care and where you live in circumstances where you are unable to make such decisions yourself due to incapacity. It can also include the power for your attorneys to make life sustaining treatment decisions.
For LPAs for Property and Financial Affairs (LPA PF) your attorneys will be able to make decisions about all your property and financial matters. This can include paying your bills, collecting your income and selling your house.
You can include preferences and instructions in the documents to guide your attorneys, however it is important to be careful when drafting these, so you do not unduly restrict your attorneys.
Who can I appoint as an attorney for an LPA?
Attorneys must be 18 or over, and for an LPA PF the attorney cannot be bankrupt or subject to a debt relief order. Otherwise, you have almost complete flexibility over who you choose to appoint as an attorney. You should consider appointing people you trust, and from a practical point, they should be people you think will work well together.
Attorneys do not need to be related to you, so you might consider appointing a professional if you have complicated financial or family circumstances. Trust Corporations, such as B P Collins Trust Corporation Limited, can be appointed for the LPA PF.
When can an EPA or LPA be used?
LPAs for Health and Welfare can only be used once you have lost mental capacity.
For LPAs for Property and Financial Affairs you can choose for the document to either be useable only once you have lost capacity, or while you retain capacity but only with your consent.
In both cases, the LPAs must be registered with the Office of the Public Guardian before they can be used.
EPAs can be used without being registered; however the attorneys have a duty to register the EPA at the Office of the Public Guardian once the person who made it starts to lose mental capacity and there is a specific notification process which must be followed.
What does an LPA mean for my Will?
Both your Will and LPA are important documents and are completely separate from one another. Your attorneys under your LPA cannot make a Will for you or change your existing Will.
If you know someone who has lost capacity without putting a Will in place it is possible to make an application to the Court of Protection for a Statutory Will. However, this process is longer and more complicated than simply making a Will yourself, so where possible we recommend that you put a Will in place now, and review it every five years or on a change in familial or financial circumstances.
What happens if you don’t have an EPA or LPA and lose mental capacity?
If you lose mental capacity without an EPA or LPA in place and someone needs to manage your finances, then they will need to make an application to the Court of Protection for a Deputyship. A Deputy will be appointed by the Court and will not necessarily be the person you would have wanted or be given the powers you would have chosen. The process is time consuming, and the Deputy also has reporting obligations.
We would always recommend putting an LPA in place before you think it is necessary, but if you know someone who needs a Deputyship our team are happy to guide you through the process.
If you are thinking about putting in place an LPA or making or reviewing your Will, or are considering registering an EPA or making an application for a Statutory Will or Deputyship on behalf of a loved one our team are here to help. Please contact enquiries@bpcollins.co.uk or call 01753 889995.
