How a Lasting Power of Attorney works

None of us want to consider what might happen if we are no longer able to look after ourselves, or make our own decisions. While it may seem morbid, it’s important to plan for such events before they occur so you can be sure that if you are incapacitated either through ill health or an accident, your wishes are respected and carried out.

There is a legal safeguard, known as Lasting Power of Attorney, or LPA, that you can put in place precisely for situations such as this. Here, we take a closer look at how LPAs work and how you can set one up.

What is Lasting Power of Attorney?

A Lasting Power of Attorney is a document that set out who is authorised to act on your behalf if your mental and/or physical health deteriorates. This person is referred to as an ‘attorney’, but they don’t have to be a legal professional. Most people choose a family member, friend, or even a business partner or financial adviser. It’s a good idea to appoint more than one attorney in case the attorney you choose is unable to make decisions themselves or dies. You can change your attorney at any time, so long as you still have the capacity to make your own decisions. The most important thing is that you trust your attorney.

There are two types of LPA: A property and financial affairs LPA, and a health and welfare LPA. A property and financial affairs LPA means the your attorney or attorneys will manage your finances. This includes things like signing financial documents, or managing any property or assets you own. A health and welfare LPA means you attorneys can make decisions about your health and care. This can include where you live, for example if you have to go into a nursing home. While a health and welfare LPA cannot be used while you are mentally capable, a property and financial affairs LPA can still be used while you retain the ability to make your own decisions. If you own a company, it may be beneficial to set a separate property and financial affairs LPA for your business affairs.

LPAs are sometimes referred to as ‘living wills’ but there is actually a difference between these. A living will, also called an Advance Decision, is a legal document drawn up with a solicitor that can set out what happens with your medical treatments should you be unable to make this decision yourself.

There is no legal requirement to make an LPA, but financial experts are worried not enough people are making them. A report into Later Life in the United Kingdom by Age UK predicted that the number of us needing complex care will rise over the next 20 years and warned this increase would also come with increased dependency, dementia and comorbidity.

Setting up an LPA is associated with older age, but most legal experts recommend setting one up as soon as you can. For example, if you are younger and suffer serious but short-term medical issues as a result of illness or an accident, it can allow others to manage your finances or care until you get better.

How do I make an LPA?

You can register for an LPA online. Each LPA costs £82, so if you choose to take out both types of LPA then the total cost is £164. There is a 50 per cent discount for those on an income of £12,000 a year or lower and certain benefits may allow you to make an LPA for free.

Some people choose to use solicitors however all LPA have to be registered with the Office of the Public Guardian. It can take up to 20 weeks to be registered if there are no mistakes in the application. Once registered, you will have the Office of Public Guardianship official stamp with the date on the front. If you can see the official stamp and date, it means it is registered and can be used.

LPAs come under the Mental Capacity Act 2005, which means that it is assumed you can make your own decisions and any attorneys must help you as much as they can. However if this is not completely clear, you may have to involve a doctor or someone who is able to carry out an assessment to see if you have the capacity to make a decision. If you are in the early stages of dementia but are still capable of making decisions, you may want to get a solicitor involved in helping you set up an LPA. Once made, the registered LPAs can be stored until they are ready to be used, if ever. 

When you set up your LPA you can include restrictions that mean the Court of Protection can step in to oversee certain decisions. All decisions made by attorneys must be made in your best interest. A good example would be if you were no longer able to look after yourself in your home and your home needed to be sold for long term residential care. If this was the case, then the attorneys would have to assist solicitors and the sale of the property.

If you choose to have a living will and an LPA are drawn up, it’s important to make sure the two documents do not contradict each other. The solicitor involved in setting up your will should be able to offer you some guidance around this.

Should I tell my family about LPA?

It’s a good idea to speak to your family about any plans you have. If you are asking family members to act as attorneys then they will need to know, as they’ll be sent copies of the LPA and asked to sign witness documents.

Having a conversation about later life plans, whether around medical treatment, welfare or finances, can be challenging but it is best to speak to your loved ones about your plans. This will prepare them to act on your behalf as well as making sure they keep your wishes in mind.