An LPA is a legal document enabling you to appoint the people you trust to act on your behalf when you are no longer able to make decisions or manage your affairs yourself.
Losing the mental capacity to manage your personal affairs can happen suddenly or gradually over time. It might be due to illness, injury or age-related cognitive decline. Whatever the cause, it is essential that you have appointed the people you trust as attorneys under your LPAs, so they can make important decisions for you.
How LPAs work
There are two types of LPA.
‘Property and Financial Affairs’ (P&A) LPA
This deals with your assets and financial matters, such as managing and selling your property, accessing your bank accounts to be able to pay your bills, and managing your pensions and investments.
P&A LPAs replace Enduring Powers of Attorney (EPAs). An EPA made before October 2007 is valid, but it must now be Registered with the Office of Public Guardian (OPG) before it can be used, and it can only be registered once you have lost mental capacity – creating months of delays when nobody can act for you.
While you still have mental capacity to manage your own property and financial affairs, your Attorneys under a P&A LPA can deal with these matters for you if you give them your consent to do so.
Once you have lost mental capacity, they will be able to deal with all these decisions without your additional consent, as the LPA already gives your specific permission to act in this eventuality.
Your P&A Attorneys must always act in your best interests.
‘Health and Welfare’ (H&W) LPA
This deals with your health and care, including making decisions about:
- where you should live
- who should be involved in your life (protecting you from people who may take advantage of you)
- the levels of treatment you should receive
- arrangements for your day-to-day care, such as dealing with social services or other care authorities
The H&W Attorneys can only act once you have lost the mental capacity to make decisions yourself, and they must take all reasonable steps to help you make decisions before stepping in to make them for you. The decisions they make must be in your best interests.
Within the H&W LPA you may also give your Attorneys the authority to give or refuse consent to life sustaining treatment on your behalf. Again, your H&W Attorneys must always act in your best interests.
Both types of LPA must be registered with the Office of the Public Guardian (OPG) before they can be used. We always advise clients to register at the time the LPAs are drafted, as the process takes several months. The registration fee is paid directly to the OPG and is VAT exempt.
How LPAs differ from EPAs
LPAs are both more flexible and more complex (and therefore more costly) than EPAs, but with the complexity comes many improvements:
- the H&W LPA covers all health and welfare decisions which are not catered for under an EPA
- it is possible to appoint replacement attorneys in the LPAs in case an attorney should become unable/unwilling to act or loses mental capacity themselves, and to appoint specific replacements for each Attorney
- it is possible to impose restriction and conditions or provide guidance for your attorneys as to how they should act under certain circumstances, and whether or when you would want them to act together, or you wish them to act independently as they agree themselves
Why should you make LPAs?
The benefits are considerable, including:
- You and your relatives will have peace of mind. You’ll know trusted individuals will look after both your property and financial concerns and your health and welfare, as soon as this is needed.
- Preventing family disagreements as to who should be involved with your finances and care, as you will have made that decision in a considered manner while you had mental capacity.
- Avoid the need for an application to the Court of Protection to appoint a Deputy. This is a lengthy and expensive process, involving a high degree of uncertainty – as the court will decide who should manage your financial affairs (more about the Court of Protection below).
- And, please note, they only allow deputies for health and welfare situations to make very restricted decisions on your behalf, meaning your loved ones would have very little authority without a H&W LPA.
What is the Court of Protection?
The Government’s ‘Court of Protection’ is the body set up to manage the affairs of people who can’t manage them themselves and who haven’t appointed anyone to do it for them by drafting Lasting Powers of Attorney.
Should you lose mental capacity without LPAs in place, your family will need to get PERMISSION for all, decisions involving your welfare and the use of your assets. This even includes your joint and business assets!
As a result, your family may have years of intrusion, and expense at the hands of the Court of Protection and the Office of the Public Guardian (OPG – the Court’s civil service administrators). Hence why LPAs are so important.
The realities of the Court of Protection
As of July 2024, there were over 60,500 clients registered with the Court, all considered by the Government to be too mentally incapacitated to act on their own behalf. Because they have not granted Power of Attorney to anybody, their affairs are placed under the jurisdiction of the Court.
This means their relatives must apply to the Court to be appointed to act on their behalf as the Court’s ‘Deputy’.
- The Court has full discretion as to who it appoints as its Deputy – it may choose a close family member e.g. your spouse or child, or it could select a complete stranger or an organisation – such as a solicitor or local authority. The Court will decide, in private, if they think your family are ‘fit to run your everyday affairs’ as their deputy. If your family member is appointed, they will be closely monitored by the OPG.
- To apply to be a Deputy your family member must complete over 50 pages across multiple forms, giving huge amounts of personal information about themselves, their family, their own finances and their relationship with you – the person they wish to care for.
- If they are appointed as Deputy – and it is by no means guaranteed they will be – the Court charges numerous fees to supervise their activities.
- The OPG takes full control of your finances, essentially quashing the Deputies’ independence – who will continuously have to obtain authorisation from the OPG to pay expenses (such as your general household bills or care fees) on your behalf. They will then have to wait several weeks for the Court to give permission for the OPG to release the funds. And for every decision the Court makes, they charge a fee!
- If the Deputy does not do everything they are told to do, the Court can withdraw their right to be a deputy. An unknown person appointed by the Court could step in and take over the running of your life.
In July 2024 the Court of Protection fees included:
the Application fee | £460 |
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a Deputy Assessment fee | £100 |
a commencement fee | £240 |
an appointment fees | £315 |
ANNUAL general supervision fees | up to £800 |
administration fees | £190 – £240 |
an account set up fee | £100 |
transaction fees | £60-£540 |
accountants fees (to produce annual report and accounts) | |
a winding-up fee | £290 |
All of which will run over as many years as you have lost mental capacity.
Visit the government’s website for the most up to date court fees.
Essentially the Court of Protection’s primary role is to protect you from your loved ones. It does this in order to protect itself from any accusations of wrongdoing should you ever recover mental capacity.
Those who have been subjected to the Court of Protection view it as a cruel, alien, intrusive, costly, time consuming, archaic, bureaucratic and legal nightmare, and in its treatment of Deputies it does not distinguish between a close family member or a virtual stranger.
Is this what you want for your loved ones…?
Ensure you have the right protection in place
Lasting Powers of Attorney should be a very serious consideration for every adult. Without one in place your family may have years of intrusion and expense in having to deal with the Court of Protection.
For help setting up your Lasting Power of Attorney, contact Rachael.