Lasting Powers of Attorney - do you need one?

Written by Nick Fluck

We see a lot of clients who have been advised (sometimes elsewhere) to make Lasting Powers of Attorney ("LPA").

Generally speaking most clients do not clearly understand why this is a sensible thing to do so this article sets out to look at the pros and cons.

Firstly, what is an LPA?
This is the modern form of an Enduring Power of Attorney - in those the power "endured" regardless of the mental or physical state of the person who set it up (usually called the "donor" (Latin for "giver")) as a Power of Attorney is usually "given" by the donor to their trusted stand-in or attorney. 

In just the same way as Enduring Powers of Attorney continued to be applicable even after the donor lost capacity the "Lasting" in lasting powers of attorney means that the powers granted by the donor to the attorney "last" in the same circumstances.  Just to make this a little clearer - there are also "ordinary" powers of attorney - these neither endure nor last - if the donor loses capacity the power of attorney can no longer be used as the power to use it is an extension to the powers of the original donor - so, if they can no longer act, neither can their attorney.

They come in two flavours.
LPA for property and financial affairs - these allow the attorney to make decisions and deal with the property and finances of the donor.

LPA for health and welfare - these allow the attorney to make decisions about health care (including agreeing to or refusing life sustaining treatment, if the donor wishes them to have these powers) and welfare generally.

Why should I / shouldn't I make one?
The vast majority of people will be fortunate and will retain mental and physical capacity to make their own decisions and sign their own documents for their whole life.  However each step forward in medical care makes it more likely that an increasing  number of us will lose the capacity to manage our own affairs - and for those folk having a trusted appointed attorney may be vital.  For many purposes the LPA may take effect as though it were a Will but allowing your attorney to deal with your affairs during your lifetime, rather than allowing your executors to deal with them after your death. If you have any concerns about what would happen if you were to lose capacity then you should certainly consider making an LPA.

The real difficulty is that the LPA is not something which can be set up in a few minutes.  The forms do not take long to complete but registering the power with the Office of the Public Guardian (a necessary first step before the power is valid) currently takes 8-10 weeks - not conducive to urgent decision-making - and this is probably the most important reason for making an LPA when you don't have any urgent need to.

Crucial things to understand.
An LPA does not usually give attorneys any powers to benefit themselves - the entire regime is set up on the basis that decisions made by an attorney must be made in the best interests of the donor - this sometimes leads to some serious difficulties - for example if one of a married couple becomes unwell and cannot any longer manage their own affairs it may seem logical that their half share in the matrimonial home might be passed to their children - after all if they are in a home they no longer need it and it would be better for their financial interest in the property not to still be in their hands if questions about their ability to pay fees may arise - but would the actions of the attorneys deciding to transfer the patient's property share be legal?

Regardless of LPA - most healthcare decisions are taken on the basis of perceived medical need - doctors admitting someone to hospital in a distressed or confused state will tend to treat the symptoms first and may have no idea whether there is an LPA giving a third party the right to be involved in health care decisions.

So who should I appoint?
If you have a trusted next generation appointing someone who is younger and fitter but who has your interests at heart is usually a good bet. There are rapacious children who would conspire to do their parent down - but they are fortunately very rare.

How should I appoint my attorney(s)?
I think the commonest mistake most people make when constructing their own LPA is to appoint more than one attorney but to then specify that they must act "Jointly" - if you have three attorneys and all of them are appointed jointly then if any one of them dies, is unavailable, or declines to act, their individual action (or inaction) means that no other attorney can carry out your wishes as you said they could only do this if they acted "jointly".  It is far better to opt for "jointly and severally" which basically means your attorneys can act alone or together - this means any of your attorneys can make decisions for you even if the others are away, unwell or perhaps even dead.

Restrictions:
Many folk get very exercised about whether or not they should impose restrictions or conditions upon what their attorney(s) can do.  For example some people regard their home as so important that their attorneys should not be allowed to consider selling it unless they are unanimous - or unless a doctor certifies that they have lost capacity.  My own view is that rather than imposing restrictions on what the attorneys can do it is usually better to choose an attorney whose judgement you trust and who you know will look after you as a priority.

We are always happy to help clients consider Lasting Powers of Attorney - please contact our Julia Thompson or Nick Fluck via our contacts pages for more details.

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