Heard of an LPA (Lasting Power of Attorney) but not sure quite why you might need one? Or why it might help your family look after you when you can't look after yourself?

Our new series “Top Questions About…” turns the spotlight on probably the two most important legal documents you can make, and why you need to register yours ASAP.

Let's start with the basics:

What is an LPA?

A Lasting Power of Attorney (LPA) is a legal document that allows someone you choose to make important decisions on your behalf. You can make your LPA at any time during your life (yes, even in your 20's, 30's or 40's), so long as you have the mental capacity to do so.

What is an attorney?

An attorney is someone you appoint in your LPA to act on your behalf if you lose the capacity to manage decisions on your own. Despite their name, your attorneys do not require any legal experience. However, they are legally obliged to follow your wishes as laid out in your LPA and always act in your best interests.

How do I activate my LPA?

LPAs are registered at the Office of the Public Guardian (OPG) and only activated when needed. As the person named in the LPA (the 'donor') you don't 'switch on' your LPA. That is only done when you lose the capacity to make your own decisions and your attorneys need to step in. This can be temporarily (if you are incapacitated / in hospital) or for the future as part of your long-term care planning.

How many LPAs do I need?

You need two types of LPAs:

• Your Health and Welfare Lasting Power of Attorney gives your attorneys the power to make decisions about your medical treatments and long-term care.
• Your Property and Finance Lasting Power of Attorney give your attorneys authority to manage your bank accounts, pay bills, collect benefits and pensions, make financial decisions on your behalf and even sell your home.

Each LPA requires a separate form and separately named attorneys. You can and should have more than one attorney per LPA.

Who should I appoint as my attorney/s?

Attorneys for your LPA are very special people. They need to understand how your life runs now and anticipate what your future needs may be. They need to be trustworthy and financially savvy to deal with your accounts. And they need to do all this alongside their own daily lives. So, choose your attorneys wisely.

Should I appoint more than one attorney?

It's a good idea to appoint more than one attorney per LPA. Appointing two or three attorneys provides reassurance that your attorneys can share the decisions as well as the day-to-day admin between them. It also gives you the opportunity to appoint people with different skillsets, not just your adult children.

If you only have one attorney and they cannot act due to their own capacity or pass away, the document is no use and you will have to create a new one. This can be a timely and costly process when you need it most.

Making your spouse or partner the sole attorney is not a good idea, as if you subsequently separate or divorce, you'll need to make a new LPA to remove them.

Do I need to ask my attorneys in advance of making my LPAs?

Absolutely yes. You must check that any individual is happy to be an attorney. Be prepared with an option B if they say no thanks - after all, it is quite a big ask. All your attorneys have to sign the documents and they will be sent a notification letter. They then have 3 weeks to raise any concerns with the OPG. You can appoint the same attorneys for both LPA types, or different ones, and you can also appoint a 'replacement' attorney, just in case.

Do I need to meet with my attorneys before making an LPA?

It's certainly a good idea to talk before making the LPA so your attorneys are aware of your circumstances and personal preferences. Indeed, the Gov website encourages attorneys to talk to you in advance as well!

“Prepare by talking to the donor so you're ready to make decisions in their best interests. For example, ask about their plans for their money or how they want to be cared for if they become seriously ill.”

You can then write your wishes into your LPA without them coming as a surprise if and when your attorneys need to act.

Do I need a solicitor to draw up my LPAs?

An LPA is an important and legally binding document, and we recommend you seek professional help from a professional with experience in completing LPAs, such as our own Paul Hammond here at Panthera Estate Planning. You do not need to use a legal firm.

You can complete and submit your LPAs yourself on paper and online, BUT it's a detailed and somewhat confusing form. Remember that the answers you give become binding once you submit the form/s. Any minor error you make might delay the whole process, and an omission or mistake might mean you don't give your attorneys the proper permissions.

Your application may also get rejected. Nearly 30,000 LPA applications were rejected by the OPG in 2022-23 due to mistakes, according to Which?

What's more, changing details on an LPA such as the removal of an attorney after it's registered is not straightforward, as our article explains.

How long does it take to register my LPAs?

According to the latest update from the Office of the Public Guardian (OPG) “Please allow up to 20 weeks from receipt of your LPA for your application to be processed."

When we last wrote about LPA timescales, it was only 12 weeks, and that was under the paper-only system! https://www.pantheraestateplanning.co.uk/blog/new-legislation-for-lasting-power-of-attorney)

Even the OPG recognise that's a long time and point you to a page on “Short-term options for health, welfare and financial decisions”. So if you have a partner or aging relatives in poor health, ensure they have applied for their LPAs as soon as possible.

I'm an attorney. How do I tell organisations about an active LPA?

When your first contact an organisation on behalf of someone else, you need to tell them you are acting as their LPA attorney. Many companies, and especially financial institutions will require proof, which can either be:

• Certified/notarised paper copies of the LPAs that you can post

OR

• An access code that allows organisations to view the LPA online.

If you are a named attorney on an LPA created after June 2020, your activation key should be in the letter you got telling you the LPA had been registered. You can use that to generate the access codes. You should also invest in a handful of notarised copies of the LPAs, as some organisations won't accept an access code.

For more details see our article.

Why should I pay for professional help when making LPAs?

As we've said before, an LPA is an extremely important legal document. Just because you can register it online yourself doesn't mean you should! If you register your own LPAs in England and Wales, you will pay £82 (£164 for both health and financial LPAs). However, using a professional will save you time and ensure your form is completed properly according to your wishes.

If you don't make an LPA and you become incapacitated, it becomes very expensive and difficult for your family. They would need to apply to the Court of Protection to become your deputy. Fees for this start at £371 to apply for deputyship, plus £494 if the court decides your case needs a hearing. Dealing with the Court of Protection is a lot more hassle and time-consuming as they have to approve everything, and they require annual reports.

What's the difference between Instructions and Preferences?

An LPA gives you two options about stating what you want to happen when your attorneys take over. These are:

• Instructions

and

• Preferences.

Make sure you know the difference before completing the LPA forms.

Instructions are legally binding, so your attorneys must follow them. As the government website explains:

“This may include, for example, requirements about medical treatment or an instruction not to sell a home you intend to leave to your partner or children.”

Preferences are not binding, but your attorneys need to take these into consideration. As the government website explains:

“This may be because there has been a change in your situation and you, therefore, give them the opportunity to consider your best interests at this time.”

Can my attorneys make decisions together?

On your LPA, you have the option of whether your attorneys act:

• Jointly
• Severally
• Jointly and severally

Most people opt for “Jointly and severally”, which means that attorneys can work together but also take action individually. For example, your attorneys might jointly agree to sell your car, and agree that one attorney does the paperwork and clinches the deal.

Can I make a Lasting Power of Attorney for my business?

Yes, and it’s something not many business owners know about either. You can set up a business LPA that is totally separate from your personal Finance and Property LPA. Your business LPA can ensure the smooth running of your business if you are temporarily incapacitated, and lays down what happens if you remain incapacitated. Read more about business LPAs here.

Ready to set up your LPAs for you and your partner?

Let's get started! Contact us to make an appointment to discuss your requirements, and to get the LPA process started.

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