Property and Financial Affairs LPAs
(WITH IMPLICATIONS for HEALTH and WELFARE LASTING POWERS of ATTORNEY [LPAs])
What are LPAs in the Broadest Sense?
What is a Lasting Power of Attorney in England and Wales?
Prior to 1st October 2007 there was another system called ‘enduring powers of attorney’ which largely addressed issues of money and property. But a new Lasting Power of Attorney (LPA) was created under the Mental Capacity Act (MCA) of 2005 and essentially it covers not just money and property but medical issues too. So, in a sense, LPAs reflect changing times in respect of 21st century healthcare and the sad circumstances that can arise from it.
LPAs are intended to make arrangements for any circumstances in which people over 18 (and they are referred to as ‘donors’, though importantly this is not in the medical – i.e. human tissue – sense) might – and ultimately do – lack the capacity to look after their own personal, financial or business affairs.
The LPA allows those donors to make appropriate arrangements for one or more family members (who subsequently become the donor’s ‘attorney’ or ‘attorneys’) to make decisions on the donors’ behalves. LPAs are overseen by the Office of the Public Guardian (OPG) and that, in itself, falls within the remit of the Ministry of Justice. Moreover, if something went wrong, the Financial Ombudsman would have the power to investigate and rule too. So there are stringent safeguards to protect donors.
Obviously such LPAs might kick in where such circumstances are expected e.g. where the donor has been diagnosed with early-onset Alzheimer’s. Or where they would be unexpected e.g. where the donor is in a persistent vegetative state (PVS) or coma after a road traffic accident, a stroke or a life-saving emergency operation.
Importantly different regulations apply in Scotland and Northern Ireland. But for an LPA to be drawn up here in the UK a donor does not need to be a resident or even be a British citizen. And the donor can end or change an LPA, if they possess the faculties to do so, using a ‘deed of revocation’ or a ‘partial deed of revocation’ respectively.
Could an LPA be Abused When I Still Have All My Marbles?
The MCA has lots of built-in safeguards to prevent wilful abuse – or accidental misuse – by attorneys. But most importantly there are 5 guiding principles that are best understood as questions that must be asked about the donor’s mental state before LPAs are executed:
- The donor is assumed to have capacity unless it’s clear that actually they don’t
- A donor can’t be considered as unable to make a decision unless all practicable efforts to involve them in the process have failed
- A bad decision already made by the donor does not mean they are henceforth deemed to be incapable of making good decisions
- Any decisions or acts made under a LPA have to self-evidently be made in the donor’s best interests
- Any decision or act under an LPA should still respect, as much as possible, the donor’s rights and freedom of action.
If Push Comes to Shove, How Does Anybody Decide Where I Have (or Have Not) Lost My Faculties?
Of course any decision regarding a donor’s capacity might easily be thought of as subjective rather than objective. But commonly the question asked of a donor is decision-specific. It is: ‘Could they safely be left to use a gas ring without supervision?’ Indeed the MCA says this question is ‘a single clear test for assessing whether a person lacks capacity to take a particular decision at a particular time’.
What Might Go Wrong?
Sadly quite a few things. Of course matters could be complicated if, for example, a sole attorney dies before the donor. This is where you would be better talking to Goodwills. We don’t have a crystal ball but we do have the vast experience to anticipate a broad range of scenarios and advise accordingly.
A Property and Financial Affairs Lasting Power of Attorney (LPA)
An LPA gives an attorney powers to immediately make decisions about money and property on the donor’s behalf. Their decisions and actions might include:
- Managing bank and building society accounts
- Paying bills
- Collecting benefits and pensions
- Selling your home(s)
Where Can You Find Out More About LPAs?
You can find out more on LPAs at Goodwills though the government website will tell you a lot at www.gov.uk/power-of-attorney.