Implementing Lasting Powers of Attorney

A lasting power of attorney is a legal document enabling an individual to appoint a trusted person to make decisions on their behalf, typically in case they become incapacitated to do so themselves. This can be crucial, offering reassurance that their finances will be managed according to their wishes if they can no longer make decisions independently.

Lasting powers of attorney were introduced in 2007 under the Mental Capacity Act, replacing the previous system of enduring powers of attorney.

There are two types of LPAs

• Property and financial affairs - these allow the attorney to make decisions about an individual’s property, finances and other assets.
• Health and welfare LPA - allows the attorney to make decisions about an individual’s personal care and medical treatment. 

Enduring Power of Attorneys (EPAs) provided similar rights to a property and finance LPA; however, it has not been possible to create a new EPA since the Mental Capacity Act took effect. Those signed and dated before 2007 can still be registered, and they continue to be applicable and valid.

Validity of an LPA

For an LPA to be legally valid, it must be registered with the Office of the Public Guardian (OPG) before it can be used. The nominated individual must be aged 18 or older and have mental capacity to make informed decisions. This broadly means they understand the nature and effect of the document and can make decisions about their own affairs.

Who are Appointed Attorneys?

One or more people can serve as the attorney.

Appointed attorneys can be given the authority to act in two possible ways:

• Jointly, where they must make decisions together; or
• Jointly and severally, where they can make decisions independently or together.

Additionally, the individual can designate replacement attorneys who will step in if the original attorneys are unable to fulfil their duties, ensuring continuity in decision-making.

The LPA process

The first step is to obtain the LPA information pack and forms from the OPG. These can be completed by hand or pre-populated then printed using the online service on the government website (www.gov.uk). 

Once completed with the details of the individual and attorneys, the forms also need to be signed by a “certificate provider”. This individual ensures the client understands the LPA and has not been coerced into signing. The certificate provider must be either someone who has known the client well for at least two years, or a professional such as a doctor, social worker or solicitor. It is important to note that partners or family members are not eligible to act as certificate providers.

The final step is to register the LPA with the OPG, though the LPA cannot be used until registration is complete, which can take several weeks. If the individual remains capable, they can continue making decisions after the LPA is registered, either alongside the attorney or independently.

Individuals can impose specific restrictions and conditions for their attorneys in two situations: when assisting them in making decisions, and when making decisions on their behalf if they are unable to do so, even with support.

Conditions convey general wishes that they would like the attorneys to honour if possible. Restrictions explicitly outline what attorneys must do when making or supporting decisions for them.

Responsibilities of an attorney

An attorney has a legal duty to act in the individual’s best interests and must adhere to the Mental Capacity Act code of practice and its five guiding principles.

An attorney must only make decisions that they have been given the authority to make. If the LPA requires decisions to be made jointly, the attorney cannot make decisions independently.

The attorney cannot make health and welfare decisions if the individual has the mental capacity to make those decisions.

Attorneys must respect the type of LPA in place: a property and financial affairs attorney can only make financial decisions, while a health and welfare attorney can only make decisions related to health and welfare. However, many attorneys may hold both roles.

An attorney is required to keep the individual`s funds separate from their own to prevent any commingling of assets. This separation is crucial for maintaining transparency, facilitating accurate record-keeping, and upholding the fiduciary duty that the attorney owes to them.

If an attorney exceeds their authority or neglects the individual`s best interests, they must be reported to the OPG. The OPG will investigate and, if needed, can petition the Court of Protection to remove the attorney.

Using the LPA

Once the LPA has been registered, it can then be sent to third parties. In July 2020, the OPG introduced the “use an LPA” service, which allows individuals to confirm the validity of an LPA online. (Currently, this covers LPAs registered after September 2019). This service enables authorised organisations, such as banks, investment providers or healthcare providers, to verify whether an LPA is registered with the OPG and therefore legally valid, and a method for institutions to ensure that they are dealing only with appointed attorneys.

Upon registration of a new LPA, both the attorneys and the individual will receive an activation key, enabling them to establish an online account and link the LPA to it.

Subsequently, they can generate an access code to share with relevant organisations. 

LPAs and advice

Attorneys can seek professional advice when carrying out their duties, such as consulting with solicitors and financial advisers.

To make informed decisions about your planning, or if you have any concerns, please feel free to contact your usual Dentons Wealth Independent Financial Adviser.

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of financial advice. We recommend that you take financial advice before making any financial decisions.