What is an LPA?
A Lasting Power of Attorney (LPA) is a legal document which allows a person
(otherwise known as the donor) to appoint someone they know and trust to make
decisions on their behalf should they become unable to do so in the future. This person is called an attorney. Attorneys must always act in the best interest of the donor.
There are 2 types of LPA:-
- Health and Welfare
- Property and Financial Affairs
However, for the purposes of this article, we will be looking at Property and Financial
LPAs only.
What decisions can be made by your attorneys on your behalf with a Property
& Financial LPA?
Having this LPA in place will give your attorneys the authority to make the following
decisions on your behalf:
• Managing bank accounts
• Paying bills i.e. mortgage, rent and other household expenses
• Claim income and benefits for the donor
• Making decisions with regards to the home
• Buying or selling property
• Managing investments
• Insure, maintain or repair the donor’s property
The LPA will allow you to set out any preferences you would like your attorneys to
be aware of. Preferences are non-binding wishes that you would like the attorneys
to keep in mind when making decisions on your behalf. We have set out some
examples below:-
“I would like to maintain a minimum
balance of £1,000 in my current account”.
“I would like to donate £100 each year to
Age UK”
“I’d like my attorneys to consult my doctor if they think I don’t have the mental capacity to make decisions about my house. You can also set out instructions in the LPA which are legally binding and what your attorneys must follow. We have set out some examples below:-
“My attorneys must not make any gifts”
“My attorneys must not sell my home unless, in my doctor’s opinion, I can no longer
live independently”
When does it come into effect?
The donor can decide when they want the attorneys to be able to make decisions
on their behalf which is either when the donor has lost capacity or alternatively, as
soon as the LPA is registered.
What is the cost to register the LPA and what is the turnaround time?
A Property & Financial LPA can only be used once it has been registered with the Office of
Public Guardian (OPG).
There will be a registration fee payable to the OPG when the LPA is submitted. The current cost is *£82 per LPA. If you are on a low income or receive benefits, you may be eligible for fee remission. An additional form (Form LPA120) will need to be completed if you are applying for reduced fees. Registering your LPA with the OPG can take up to 16 weeks or possibly longer, depending on the volume of applications they receive, so it is important you register your LPA as soon as possible.
What Happens if you don’t have a Property & Financial LPA?
It is a common misconception that a Property and Financial Affairs LPA is only needed for
those that are of an older age.
The reality is that capacity could be lost at
any time due to a serious accident, stroke or even a degenerative condition such as
Alzheimer’s. If you should lose capacity and there is no Property and Financial Affairs LPA in place, your family and friends will not have automatic authority to make decisions on your behalf with regards to your property and financial affairs. Instead, others could
make decisions for you and the decisions made, may not be what you would have wanted.
This can cause disagreements between family members and professionals about
what is best for you.
Here are just some things to consider:-
• Joint bank account – the bank has the ability to remove access and freeze
the account without an LPA, even if you have your money in there
• Bills cannot be paid unless a kind family member pays on your behalf – but
they will not be able to compensate themselves
• Your bank accounts cannot be
accessed or managed
• Benefits cannot be claimed on your
behalf
• Your home cannot be sold if you
need to move into care
• Your mortgage deal may expire and you won’t be able to re-mortgage your property
Is there a way for someone to make decisions on my behalf after I have lost
capacity if I do not have a Property and Financial Affairs LPA?
Yes. If capacity is lost and there is no LPA in place, a friend or family member can
apply to the Court of Protection to be a Deputy for you and make decisions on your
behalf. However, this is not only a long but very expensive process which can take
6 months or even more. Therefore, it is cheaper and more effective to have an LPA
in place instead.