Should you be unable to manage your own affairs, it is a shrewd decision to authorise another person to act on your behalf. This can be achieved by creating a Power of Attorney. It is appropriate for anyone to have a Lasting Power of Attorney (LPA), as loss of mental capacity may occur at any age as a result of an accident or illness.

What is an LPA

An LPA is a legal document which enables you to decide who you trust to make decisions about your finances property or healthcare, in the unfortunate event that you can no longer do so, you will appoint them as your attorney.

There are two separate types of LPA’s:

  1. Allowing the attorneys to deal with your financial affairs; or
  2. Appointment of attorneys to deal with decisions concerning your health and care.

A person can choose to create both types of power or just one and can appoint the same person or different people to act as an attorney under each power.

Who can be appointed?

The Mental Capacity Act 2005 provides that the attorney must be an individual over the age of 18, or, if the authority is only in relation to the donor’s property and affairs, a trust corporation. The donor may appoint more than one attorney and may specify whether the appointment is joint, or joint and several. It is possible to provide that for some functions the attorneys must act jointly, and for other functions, they must act jointly or severally.

Attorneys appointed with joint authority cease to be able to act if one dies, loses capacity or (in the case of a property and financial affairs power) is declared bankrupt. However, if there are joint and several attorneys, the bankruptcy of one of the attorneys will not affect the validity of the appointment of the other non-bankrupt attorneys.

A bankrupt person can act as an attorney of a health and care LPA.

The donor may provide for a successor or substitute attorney to replace an attorney in specified circumstances, it is particularly important to appoint a replacement in the case of joint appointments.

The creation of an LPA

Only an adult with capacity can create an LPA. The prescribed form will include:

  • That you have read and understood the prescribed information and intend to confer authority to make decisions in circumstances where you have no capacity.
  • Who you wish to be notified of any application for registration of the Lasting Power of Attorney.
  • That the Attorney has read and understood the prescribed information and understands their duty to act in your best interest.
  • A certificate signed by a person of a ‘prescribed description’ as to the charity of the donor.

There are sections on each type of LPA in which the donor can set out ‘instructions’ and ‘preferences’. It is for the donor to decide what, if anything, to include here. However, it is important for anyone who wants their attorney to be able to use discretionary fund management to include a clause authorising the attorney to do so:

My attorney(s) may transfer my investments into a discretionary fund management scheme. Or, if I already had investments in a discretionary management scheme before I lost capacity to make financial decisions, I want the scheme to continue. I understand in both cases that managers of the scheme will make investment decisions and my investments will be held in their names or the names of their nominees’.

A Lasting Power of Attorney will not have any effect at all until it is registered with the Public Guardian. There is no obligation to register the LPA once it has been executed. However, it is common to register it as soon as the lasting power of attorney is made.

Audley Chaucer’s lawyers are experienced in drafting Powers of Attorney and filing these with the Office of the Public Guardian. Please contact Kay Stewart or John Szepietowski for further information.


Joseph Beams

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