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The problem: Charlie and Joan are retired teachers. Joan has had experience of having her father lose mental capacity due to dementia.

There was no lasting power of attorney in place so Joan had to apply to the Office of the Public Guardian to become a deputy in order to get the legal authority to deal with her father’s financial affairs. This was a lengthy process that Joan would like to avoid their only child David having to go through, so she has asked for additional information on lasting powers of attorney.

Issues to consider:

  • What type of lasting power do they want to effect?
  • Executing the LPA with the appropriate formalities to ensure it is valid
  • Who they would like their attorney to be and when the power should take effect

The solution:
The lasting power of attorney was introduced into England and Wales on October 1, 2007, replacing and extending the previous Enduring Power of Attorney Act 1985.

An LPA is a legal document that allows an individual to appoint an attorney who could be a relative, friend or a professional to make certain decisions on their behalf in certain circumstances.

There are two types of LPA – property & affairs, and personal welfare.

The property and affairs LPA allows you to choose an attorney to make decisions about how to spend your money and how your property and financial affairs are managed.

This type of power of attorney can be used while Joan is still mentally capable, unless it is restricted. Even though Joan may still be able to make decisions herself, it may be easier to delegate certain powers. For example, if Joan is considering spending long periods of time out of the country or finds it difficult to talk on the phone.

The main difference between this type of power and a general power is the fact that it remains valid even if the donor becomes mentally incapable.

If Joan would prefer the LPA not to come into effect until she lacks mental capacity, it can be drafted in this way. This means she can rest assured that she will maintain total control while she is able to make decisions, but if she is unable to she can select someone to manage her financial affairs.

If Joan also chooses to execute a personal welfare LPA, she is able to appoint different people to be her attorney(s) on each type of LPA. Joan could appoint her husband Charlie in relation to her financial affairs but appoint her son David on her personal welfare.
A personal welfare LPA allows the attorney to make decisions about your healthcare. These decisions include refusing or consenting to medical treatment on your behalf and deciding where you live. They can only be taken when Joan lacks mental capacity to make such decisions herself.

In order for any type of lasting power of attorney to be valid, it must be registered with the Office of Public Guardian. For an LPA to be valid, it has to undergo execution and creation.

The execution stage comprises the completion of the prescribed LPA. The form rigorously ensures that before execution of the document that the donor has not been placed under undue influence and that they understand the powers they are giving to their attorney.
The second stage is creation of the LPA through registration with the OPA. The LPA will not be valid until this step has been completed. The current charge for registration is £130 per LPA and takes around nine weeks to register.

In the UK, 820,000 people are currently living with dementia. Helping your clients to plan ahead will save them unnecessary stress and expense and ensure that they are in control of who makes the important decisions when they may be unable.

Rachael Griffin is head of product law and financial planning at Skandia International


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