We all work hard to create a world that will provide for us and our loved ones. Unfortunately there may come a time in our lives where something unexpected happens, that may prevent us from continuing to do so.
Though it is not pleasant to consider, anything can happen in a day that would render us mentally incapable of making our own decisions; this can arise from a developing illness or a sudden accident.
Under normal circumstances your loved ones would be left to apply to the courts to manage your affairs if you were unable to do so. This procedure can be incredibly time consuming and expensive. At an already difficult time, this places a tremendous task on our loved ones to not only care for us but to manage our affairs also.
The Mental Capacity Act 2005 provides a statutory framework which enables adults to make preparations for a time when they may lack capacity in the future by putting in place a ‘Lasting Power of Attorney’ (“LPA”).
The LPA is one of the biggest safety nets you can create in your lifetime.
An LPA comes in two forms:
- Property and Financial Affairs
This is designed for you to appoint an attorney (or attorneys) to make a wide range of decisions on your behalf in relation to property or financial affairs. This can include buying or selling your house, dealing with tax issues, operating your bank accounts and claiming any benefits on your behalf
This is designed for you to appoint an attorney (or attorneys) to make a more narrow range of decisions on your behalf in relation to your welfare. This can include your living accommodation and care, consenting or refusing medical treatment in accordance with your wishes and other day to day matters.
A property and financial affairs LPA can be used either at your discretion (i.e. on your authority) or when you lack mental capacity. The health and welfare LPA can only be used once you lack mental capacity.
Your attorney must be over 18 and be someone that you trust to act in your best interests. If there is not a registered LPA and your loved ones are left to apply to the court, the court may appoint someone they deem appropriate – this may not necessarily the person you wish to have as your attorney.
You can appoint more than one attorney and can elect to have them act jointly or jointly and severally. If you elect for them to act jointly, all decisions must be made with the consent of both attorneys. If one attorney passes away, then neither attorney can act on their own. They are considered ‘one entity’. If you select joint and several, the attorneys can make decisions on their own without the consent of the other and if one passes away, the surviving attorney may still act. You can also elect to have some decisions be made jointly and others joint and several.
Some people prefer to keep it simple and have just one attorney but are worried about that person pre-deceasing them. To avoid a situation where the LPA becomes invalid and a new one need to be registered, they appoint a replacement attorney to be appointed only in the circumstance where the original attorney is unable to act themselves for any reason. This provides extra security if you require.
The legislation has introduced a person known as the ‘certifier’. This person must be over 18 and be wholly independent of both the person making the LPA and the named attorneys. They must either know you well or be a professional person i.e. doctor, solicitor. They must sign a form to confirm that they have discussed the contents of the LPA and that they can confirm that you fully understand the purpose and scope of the LPA and that no undue pressure or fraud is involved.
Can I make specific restrictions?
An LPA can be as detailed or flexible as you prefer. You can insert limitations, preferences or extra instructions to ensure that your assets are managed exactly how you deem appropriate. For example ‘I prefer to invest in ethical funds’, ‘my attorneys must instruct a qualified tax accountant to prepare my annual tax return’ or ‘my attorneys must continue to donate to charities that I have supported or which I have set up standing order payments’.
For health and welfare LPA you may wish to insert preference and instructions such as ‘I prefer to live within 10 miles of my children’ or ‘I wish for my pets to live with me as long as possible and if I go into a care home, I would like to take them with me’.
The key advantage of an LPA is that it will give you peace of mind knowing you are prepared for the worst and will give you a voice when you may have lost yours.
Call us today to arrange a free consultation where we can discuss your LPA in more detail and find the best way to look after your future.