Why a Lasting Power of Attorney is Important for Us All - Part II

Following my article in last quarter’s newsletter, I wanted to continue to explain why Lasting Powers of Attorney (‘LPA’s) are important and how you can go about setting up a Health & Welfare or Financial Affairs LPA. I’m going to recap the difference between the 2 arrangements and discuss how you, the ‘Donor’, might identify the right people to look after your affairs (the ‘Attorneys’). Lastly, I’ll explain the role of the Certification Provider; in short, the person who will provide evidence that you are granting the power of attorney of your own free will and with full knowledge of what this involves.

A Health and Welfare LPA only comes into operation when you lose capacity to make decisions for yourself. A classic example would be if an individual were suffering from advanced Alzheimer’s or Dementia. However, it could also be useful if someone had suffered a stroke or been involved in a very serious accident.  In such a situation, a trusted friend or relative can then decide what type of care the individual can receive and arrange medical treatment on their behalf.  If you grant a Health and Welfare LPA and subsequently lose capacity to look after yourself, the attorneys can decide everything from matters relating to your daily routine through to whom receives Easter eggs from you and how much is paid for them. The key point here is that you’ve lost mental capacity; there is no way that creating a Health and Welfare LPA today can enable anyone else to deal with your private affairs unless you are no longer fit to do so.

You are also in control of when a Financial Affairs LPA is invoked. Whilst you can elect for it to be used at any time, this decision is yours and yours alone. You might decide that mobility issues make it difficult for you to meet with your accountant or hearing loss has made discussing matters with your investment manager increasingly difficult. You can decide to invoke the Financial Affairs LPA in very specific instances such as the next annual review with your CAM planning team whilst remaining in general day to day control of your finances.

As we’ve already mentioned, you need to be 18 and have full mental capacity to set up an LPA. The attorneys that you appoint must also be 18 or over and have the ability to make decisions for you. There is no requirement that your attorneys be UK resident but it is likely to be more convenient if 1 or more of them is. On the subject of the number of attorneys needed, we would always advise that an LPA has at least 2 people appointed as the whole arrangement will fail if there is only 1 attorney and they themselves become unable to continue to act in that capacity for any reason. In selecting your attorneys, the focus should be on finding people that you trust and can rely upon. They should understand your views and priorities and, ideally, your preferences in matters that they may have to decide upon in the future. This might include whether to go into residential care or remain at home or who you would want to visit or make gifts to. In the case of a Financial Affairs LPA, your might want to ensure that your attorneys understand how much risk you want to take in making investments and whether sustainability is important to you.

If, at any time, one of your attorneys needs to step down there is a simple process to replace him or her with a new trusted helper by registering that change with the Office of the Public Guardian. This creates an administrative burden but you can in fact change attorneys are many times as you wish under a single LPA so don’t let the fact that you might not need an LPA for some time put you off creating the arrangement. It’s fine if your best friend from the school gates or golf partner moves to Australia in 2027; you can simply appoint a replacement.

Once you’ve found the right people to act on your behalf and, crucially, they’ve agreed to do so, you need to find what’s called a ‘certificate provider’. This person will act in your best interests to tell the OPG that you’ve got the capacity to make the decision to create an LPA and you’ve done so of your own free will. Again, provided the individual is 18 or over, you can choose whomever you wish. Perhaps a close neighbour or someone you volunteer at the library with. Other than making that initial statement that you are fit and acting freely in making the LPA there is no further burden upon them to act, so this is not a potentially onerous role like agreeing to be an Attorney.