Did you know that the World Health Organization estimates that 1 in 6 people in the world are living with a disability? These numbers are only expected to rise as non-communicable diseases and increased lifespans become more common. While most people believe that creating a will is enough for estate planning, it is actually even more important to consider the possibility of old age, illness, and disability.
A Lasting Power of Attorney (known as LPA for short) is a document that gives the attorney authority to make decisions about either a person’s property and affairs or their health and welfare. The Mental Capacity Act 2005 allows a person (referred to as the ‘donor’ i.e. the one who gives the authority to another) to appoint one or more trusted individuals (often referred to as the ‘attorneys’ or ‘donees’) to make decisions for them in the event they cannot make decisions for themselves i.e. when they become mentally or physically incapable of making decisions for themselves. Note, however, an LPA appointed for property and affairs can make decisions for the donor even whilst they have capacity, if the donor chooses to give the attorney that authority.
When a person has capacity for the decisions in question, they are able to appoint an LPA for the eventuality that they lack capacity. However, when a person lacks capacity and a person needs authority to deal with the adult’s property and affairs then they must apply to the Court of Protection (COP) for a Deputyship Order, they would no longer be able to apply for an LPA in this circumstance.
Benefits of having an LPA
Below I have listed some of the benefits of having an LPA in place when it comes to the future planning of a person’s assets and provide an illustrative example to explain; These examples are not representative of actual events.
1. It protects the autonomy and interest of the donor, in the event that he or she lacks capacity to make these decisions. The LPA document itself allows the donor the opportunity to express instructions to the donees about how his health, welfare and property and finances should be managed.
Case Study – illustrative example
Let’s say Peter has the capacity to make a Lasting Power of Attorney (LPA) and chooses to do so. As a Jehovah’s Witness, he has very specific views on blood transfusion. Unfortunately, Peter is involved in a workplace accident and requires medical attention. The doctors want to give him a blood transfusion, but Peter has clearly stated in his LPA that he does not want this due to his religious beliefs. His LPAs, his son, and his daughter inform the hospital of Peter’s wishes and feelings as stated in the LPA. The hospital respects Peter’s autonomy and honors his wishes.
2. Allowing the individual the choice of who they would want to look after their affairs either financial or health and welfare should they end up in a difficult situation and not be able to make those decisions for themselves. The person would have chosen a trusted individual themselves rather than have one appointed by the court.
Case Study – illustrative example
George has developed dementia and there are concerns about his ability to manage his finances, he is also being exploited by local gang members. These concerns are brought to the attention of a Multi-Disciplinary Team (MDT). In response, the local authority applies for Deputyship of George’s property and affairs. The court then appoints the local authority as the Deputy of George’s property and affairs. This means that the decision of who manages George’s affairs is taken out of his hands and given to people who he did not choose.
3. Appointing a person as an LPA can avoid costly and time-consuming court intervention later.
Case Study – Illustrative Example
Imagine that George, who lacks capacity, owns freehold properties with long-term tenants who want to extend their leases. They give the freeholder a s.42 Notice, giving them 2 months to respond. George’s son Edward tries to assist, but cannot do so without an LPA. He must therefore apply to the Court of Protection (COP) for a Deputyship order, which requires him to hire a solicitor and pay a court fee of £371.00, as well as various other costs including capacity assessment fees (by his GP). The process takes over a year to complete and results in increased legal costs for the family. in addition, the tenants need to make a separate court application for the lease extension resulting in further additional legal costs.
It must be noted that Deputies for Health and Welfare are rarely appointed by the Court of Protection as the courts prefer to make individual health and welfare decisions as and when needed and therefore this can mean if there is a dispute about any decision between family members and professionals about a welfare issue; this would need to be taken to the Court of Protection to resolve; again resulting in increased legal costs.
Types of LPA
There are two types of LPA as mentioned above that a person can make; they can make an LPA which gives another person (a donee) authority over their personal welfare or another where the attorney is given authority over the adult’s property and affairs.
In respect of property & affairs, unless the donor specifies the restrictions, the decisions a person can make can cover anything an adult could make for themselves such as buying and selling property; opening and closing bank accounts, managing the bank accounts; dealing with tax returns, managing the expenses of the household and so on. (read The Code of Practice Mental Capacity Act, para 7.36 for the entire list).
Turning to the health and welfare LPA, again, unless the donor specifies restrictions, the donee can make decisions about anything to do with the personal welfare of the donor. Some examples are: where the donor should live and who they should live with, decisions about day-to-day care, what activities (s)he should take part in, complaints about the donor’s care and treatment and more. When the donor completes the LPA document, they will specifically state whether they allow the donee to make decisions about life-sustaining treatment i.e. decisions related to the medical treatment they should receive if they ever should need urgent life-saving medical attention.
In summary…
Many people feel anxious when making the decision to appoint an LPA however when a person has assets or even where they do not but have specific views about how their health, welfare, property and affairs should be managed, there are significant advantages in a donor setting these out through an appointment of an LPA. Decisions can be made more smoothly, allowing the donor to be at the centre of the decision making ensuring that their wishes are safeguarded, heeded and taken properly. The cost of doing the LPA is a lot less than the expensive and lengthy process of court proceedings for Deputyship. In addition, the time delays currently being experienced in obtaining orders from the Court of Protection are extensive, not to mention that a person usually applies to the court for a Deputyship when they are already in urgent need of an order so the delay can impact on a range of other decisions which affects the individual lacking capacity. An LPA has now become an essential estate planning tool which should not be overlooked. Don’t wait until it’s too late – start planning for the future today.
Anuara Ali is a solicitor at Makka Solicitors Ltd, a law firm that specialises in Private Client Law. Ms Ali has specific expertise with Mental Capacity Act and laws relating to vulnerable adults. With her extensive experience in this field, Ms Ali is able to support and advise on legal issues relating to Lasting Powers of Attorney. Contact Ms Ali on [email protected] or call 0208 767 9090 for more information.