Just as you provide in your Will for what you would like to happen to your money and property after you die you should also consider what would happen in the event that you were to lose mental capacity during your lifetime. Granting lasting powers of attorney means someone will be able to make decisions about your money and property even if you are not able.
Over 2 million people in England and Wales lack mental capacity to make their own decisions. This may be as a result of learning disabilities, dementia, stroke or other mental or physical illness. The Mental Capacity Act 2005 (The Act) provides the framework for those who lack capacity to have persons appointed to make decisions for them. Significantly the Act also provides guidance for those who have capacity but who would like to make arrangements for a time in the future when they may no longer do so.
Property and Financial Affairs Lasting Power of Attorney
A Property and Financial Affairs Lasting Power of Attorney (LPA) allows you to appoint one or more people to deal with your money and property when your are no longer able to. This person is known as your Attorney. The Property and Financial Affairs LPA must be registered with the Office of the Public Guardian before it can be used by your Attorney. The document can actually be used by your Attorney at your direction whilst you still have capacity. This may be particularly helpful in circumstances were you have a stay in hospital or just find it difficult to get out and about. It gives your Attorney the authority to make financial decisions on your behalf such as:
- Paying your bills;
- Buying items;
- Selling property; and
- Managing your investments
On notifying Banks and other institutions of the registered LPA the Attorney will be asked whether you have mental capacity or not. This is so that the Bank know whether they can also continue to deal with you or if the LPA is being used simply because it is more convenient for your Attorney to get to the bank.
Health and Welfare Lasting Power of Attorney
You may also wish an attorney to make decisions regarding your health and welfare to deal with a time in the future when you may not have capacity to make decisions for yourself. A Health and Welfare LPA is used for this purpose. As with the Property and Financial Affairs LPA it too must be registered with the Office of the Public Guardian before it can be used by your Attorneys. The lasting Health and Welfare LPA operates slightly differently because it can only be used after you have lost mental capacity. Decisions that your Attorneys may need to make on your behalf could include decisions about:-
- your medical treatment;
- your personal welfare;
- your day to day care including where you should live; and
- who should care for you and / or visit you.
These LPAs are often particularly useful for family members if there is a dispute with the local authority regarding your care needs.
We advise that both documents be registered with the Office of the Public Guardian immediately because registration can take anywhere from 12 to 16 weeks. If a document is not registered this can cause family members unnecessary stress at what is already a difficult time. The documents can then be stored, free of charge, by us to be released either with your consent (your Property and Financial LPA only) or with a medical opinion that you have lost capacity and that the LPA should therefore be released to your Attorneys.
The Office of Public Guardian fee for registration of each LPA is £82.
Your Attorneys will have the duty to act in your best interests at all times. They are bound to follow the five principles of the Mental Capacity Act 2005 and are accountable to the Office of the Public Guardian for their actions. We can also assist Attorneys with advice on the exercise of their duties under a LPA.
Contact Jonathan Jacobs, Tsyrina Tan or Karin Cox-Putker for further information, or to arrange a meeting. A free initial interview of up to half an hour may be available to you to meet us and find out whether we are able to assist you. In all cases we will give you an indication of the level of costs likely to be involved and details of relevant charging rates.