Power of Attorney – Questions and Answers

By Stephen Sale and Graham Hume

What is a Lasting Power of Attorney?

A Lasting Power of Attorney (LPA) is a legal document that allows someone (the attorney) to make decisions for you, or act on your behalf.  This may be a temporary situation, but more commonly this can be necessary in old age, due to illness or dementia.

What does a Power of Attorney cover?

There are two types of Lasting Power of Attorney: Property and Financial Affairs and Health and Welfare.

A Lasting Power of Attorney for financial decisions can cover things such as:

  • Buying and selling property.
  • Investing money.
  • Paying bills.
  • Arranging repairs to the property.
  • Paying care home fees.

The Lasting Power of Attorney for health and welfare allows the attorney to make decisions about things such as:

  • Where you live.
  • Your medical care.
  • What kind of social activities you should take part in.

Should I arrange a Power of Attorney?

We would almost always recommend arranging a Lasting Power of Attorney, as this ensures that a trusted individual or individuals will make decisions on your behalf, should the need arise.  While it is not something most of us like to think about, there may come a time when we all need help in making financial or welfare decisions.  It can therefore be reassuring to have the appropriate arrangements in place.

Who should my attorneys be?

Most people choose their spouse, children, a close family member, or perhaps a trusted friend.  You could also appoint a professional, such as a solicitor.

Choosing an attorney is an important decision. It must be someone you can trust to always act in your best interests and wherever possible, allow you to make decisions yourself.

It is not necessary to only appoint one attorney and it can be a good idea to have two.  In this case, you will need to decide whether the attorneys must act together (jointly) in all decisions or if they can potentially act independently of one another (jointly and severally).

It is also important to consider practicality.  For example, you may wish to appoint your children to be your attorneys, but it might be sensible to revise these plans if one of your children works away regularly or lives overseas.

What happens if I do not have a Lasting Power of Attorney?

Many people assume that if they are married that their spouse will automatically deal with financial arrangements if they are no longer able to do so.  However, this is not the case without a power of attorney in place.

If you do not have a power of attorney in place, the Court of Protection would appoint a deputy to make decisions on your behalf. A deputy has similar powers and responsibilities to an attorney, although the court may not necessarily appoint the same person that you would choose.  Applying to the Court of Protection will also inevitably cause delays and is more expensive that arranging a Lasting Power of Attorney.

There are also more stringent reporting requirements, when acting as a deputy.  A deputy must submit a yearly report to the court, explaining what decisions they have made and accounting for money they have spent.  This can be a time consuming and stressful process for the deputy.

For these reasons, it is far better to arrange a Lasting Power of Attorney, while you can.

How do I arrange a Lasting Power of Attorney?

You can either arrange a power of attorney yourself, or with the help of a solicitor.  While there will inevitably be a cost in using a solicitor, it is worth considering the importance of such a document.  Using a solicitor can be worthwhile as it will make the process more straightforward and give you the confidence everything has been completed and registered correctly and in line with your wishes.

The Lasting Power of Attorney must be registered with the Office of the Public Guardian before it can be used. There’s a fee of £82 to register each document, so that’s £164 for both financial affairs and health and welfare.

What is an Enduring Power of Attorney?

Enduring Power of Attorneys were replaced by Lasting Power of Attorneys in October 2007.  However, an Enduring Power of Attorney signed before this date is still valid.  An Enduring Power of Attorney covers decisions about your property and financial affairs, and it comes into effect if you lose mental capacity, or if you want someone to act on your behalf.

Beechwood advisers are happy to discuss the implications of putting a Lasting Power of Attorney in place with our clients, as part of your overall financial planning.  We are also able to provide advice to your attorneys to ensure that your savings and investments continue to be managed effectively.  Beechwood advisers are not qualified or regulated to provide legal advice and therefore we cannot arrange Lasting Power of Attorneys on behalf of our clients.

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