What is a Lasting Power of Attorney (LPA) – A Full Guide to Planning for the Unexpected

The UK alone presents 850,000 people with dementia, with figures set to rise to over a million by the year 2025. Dementia is a brain disorder that triggers loss of regular brain function leading to problems with speech, comprehension and everyday activity. It’s also one of the most common reasons individuals approach solicitors about an LPA.

An LPA can really make a difference when it comes to being able to adequately care for a person with dementia or any other debilitating condition. It gives the attorneys authority to access bank accounts, sell property and make decisions in the best interests of the donor.

An LPA in England and Wales must be applied for through the Court of Protection. The registration fee has dropped from £110 to £82 since April 2017. This article will explain what an LPA entails and advice on helping an individual manage their financial assets.

1. What is a Lasting Power of Attorney?

Serious accidents or illnesses that affect our ordinary ability to function can affect every aspect of our lives. We may convince ourselves this will never happen to us and “it’ll be fine” but if the unexpected does happen, having an LPA in place will make the task of looking after your affairs so much easier and less costly for the people you trust that want to help you.

An LPA is a legal document that allows an individual (with capacity) to nominate trusted family members and/or friends to make decisions on their behalf in respect of property, finances and healthcare.

A common misconception with LPAs is that you lose all control over your own decision making. You can opt to use an LPA either before or when you lose mental capacity.

The person you appoint as an attorney should only make a decision you are unable to make at a time of need. For example if the individual is terminally ill or in a vegetative state, the designated representative would need to act on their behalf.

The LPA was introduced in October 2007, however If you currently hold an Enduring Power of Attorney (EPA) before the 1st October 2007 then this will still be valid upon use – but must still be registered when there is loss of capacity in the individual.

2. Who will benefit from this guide on Lasting Powers of Attorney?

We find the most common conditions that establish grounds for an LPA relate to health problems like concussion, dementia and other neurological based conditions.

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3. Why you or a member of your family should set up a Lasting Power of Attorney now

If you know there might be a point in your life where you may lose capacity then it is highly recommended to apply for an LPA. You might think that it won’t affect you; however you must remember that Once you lose mental capacity, it’s too late to set up an LPA.

The Ministry of Justice has stated that they “will be encouraging younger people in their 20s and 30s to talk to their parents about LPAs”, especially if there is any genetic history that can affect mental capacity later in life.

4. What is Mental Capacity and its relevance to Lasting Powers of Attorney

Mental capacity as previously touched upon, is one’s ability to make informed day-to-day decisions, as well as comprehend and retain information. Should this be lost later in life it can make tasks such as paying bills a struggle. This is why an LPA is highly regarded for its value in decision making for the affected person in question. The LPA ‘certificate provider’ is able to decide whether you’re capable of making an informed decision.

Who decides on someone's capacity?

The person you can nominate as a certificate provider must be an individual you’ve known for at least two years, or someone in a relevant field such as a social worker, solicitor or doctor. In accordance with the Mental Capacity Act 2005 – it details a person is unable to make a decision if the following criteria have not been met:

1. “Understand the information that is relevant to the decision they want to make”

2. “Retain the information long enough to be able to make the decision”

3. “Weigh up the information available to make the decision”

4. “Communicate their decision by any possible means, including talking, using sign language, or through simple muscle movements such as blinking an eye or squeezing a hand”

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5. How to apply for a Lasting Power of Attorney

There are cases where the chosen attorney might be after vulnerable persons’ assets. This is why we ensure that individuals applying for an LPA fully understand what the forms entail. At this stage it is vital to remain cautious before and during your application, as well as make an informed decision on who you’d like your attorney to be.

Do I need to use a solicitor?

No you don’t but applying through a solicitor is advantageous as they can advise you to ensure that the LPA works as you would like it to. A solicitor will ensure that the LPA is completed properly to avoid any problems with its registration and save you time.

Lasting Power of Attorney online

You’re able to download the forms online and fill them out yourself. Keep in mind that you will need to print these forms after they’re filled out to be able to complete the forms for registration.

Once the Lasting Power of Attorney is fully registered then it can be used. However you can place restrictions on your attorney until after capacity is lost.

You, as well as your chosen representative/s must sign the forms. The ‘certificate provider’ sign the form to verify that the Lasting Power of Attorney is fully understood. Should you need help understanding and filling out these forms then the Office of the Public Guardian (OPG) is able to assist with this.

Who is able to do this?

The nominated certificate provider can be someone the person applying for the LPA has known for at least two years, or a professional within the field. Family members cannot be certificate holders and extend to the following relations:

· Spouse or civil partner

· Children, grandchildren and step-children

· Parents, grandparents and step-parents

· Brothers and sisters (including half-relations)

· Aunts and uncles

· Nieces and nephews

· Relation by marriage (in-laws)

We highly advise double checking simple fields such as date of birth and names of your attorneys – as these are the common reasons applications get rejected.

6. Registering a Lasting Power of Attorney

The final step entails posting your application to the OPG for to be fully registered.

An LPA can be registered either before or after someone loses capacity (only if they’ve signed the forms). By registering early it allows both parties time to correct any errors and use the LPA in times of urgency.

The nominated representative, once registered, will be able to make choices for the person and will be known as the ‘attorney’. Keep in mind that the attorney can only make decisions the donor is unable to make at the time a particular decision needs to be made.

The LPA registration fee itself costs £82 in England and Wales – the OPG is also able to waiver thisese fees during times of financial hardship at their discretion.

There are certain circumstances that can affect you invoking an LPA.

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7. What to do if the individual has already lost capacity and there is no LPA in place

Before any decisions can be taken on the indivdual’s behalf, an application must be made to the Court of Protection. who will then appoint a person to look after the affected individuals’ financial assets. This usually entails nominating a family member or close friend.

The two types of deputies that can be nominated are:

1. A deputy for property and financial affairs

2. A deputy for personal welfare

The court must first assess the individual’s ability to make their own decisions and if the nominated friends/family are suited for their duty of care.

This route can be costly for the deputies involved. It entails an initial charge and on-going supervision fees for the appointed deputy (depending on the required supervision level needed). More details on the deputy system.

Using a solicitor can make this process far easier and quicker.

8. Help an individual manage their finances

You might still be able to help the affected individual with simple day-to-day activities whilst an LPA is not being used. Here are a few things that can help you manage a donor’s financial assets.

Seek non-profit debt help

Organisations like StepChange are able to help manage their debts which can aid their quality of life via a Debt Management Plan (DMP). Debt counselling is also another useful service that should be made accessible in times of financial hardship.

Find a Third Party Mandate

This allows a bank to grant access to another’s account as a nominated third party. This can be particularly useful and grounds for what they can and can’t do can be established so that your finances are protected.

Every bank has their own set procedures in setting this up – call your own bank for details on this.

Help by setting up direct debits

Direct debits set up for accounts such as utilities pride themselves in offering savings switching to a direct debit plan.

By using automated payments it can eliminate the need to log into online banking or visit a bank to pay any bills. By combining this process with a third-party mandate you can also monitor their bank to ensure there is enough money for their outgoings.

Monitor their emails

Spam is highly popular and many people still fall victim to money scams that dupe them out of their money. By monitoring their emails or applying anti-phishing and spam blockers, you can greatly aid an individual who is vulnerable to these kinds of emails, especially if their capacity is in the process of depreciating.

Become an appointee

The Department of Work and Pensions (DWP) can allow a friend or relative access to the person’s benefits and use this money to pay bills and other expenses on their behalf. This step is commonly used when the person has lost capacity to pay their own bills themselves or collect their benefits.

Do a Benefit check

A benefit check can determine what you may be entitled to, especially if you have a dependant. If finances are seen to be a struggle then its worth finding out if you’re entitled to extra help.

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