Do Lasting Powers of Attorney Reduce Your Independence?

Unsurprisingly, when clients make Lasting Powers of Attorney (LPAs), they often ask if these powerful legal documents can reduce their independence or leave them open to financial abuse. Given that you can only make Powers of Attorney when you’re ‘of sound mind’, they’re excellent questions to ask before giving someone access to your finances.

So, how do LPAs work in practice, and how do we reassure those anxious about appointing someone with the power to make decisions on their behalf?

Lasting Powers of Attorney (after October 2007)

Created under the Mental Capacity Act 2005, LPAs came into effect on 1 October 2007. They replaced the Enduring Powers of Attorney (EPA), which had been in place since 1986.

LPAs allow a person to appoint someone they trust (called Attorneys) to make important decisions about their healthcare and finances on their behalf. There are two types of LPA:

1. Property and Financial Affairs LPA

When an individual creates a Property and Financial LPA, they must decide whether it can be used while they still have the capacity or only when they lose their mental ability.

An individual can ‘activate’ the document as soon as it’s registered. In that case, the Attorney(s) can only deal with the person’s financial affairs when asked, not when they feel like it.

Alternatively, individuals may delay registration and manage their financial affairs until they lose their mental capacity.

2. Health and Welfare LPA

The Health and Welfare LPA registration process is the same as for Property and Financial affairs, with a crucial difference. A Healthcare LPA can only be used if the person who had made the LPA no longer has mental capacity. In other words, an individual can’t delegate healthcare decision-making to their Attorney(s) in the same way they can with financial matters.

3. Safeguards

The powers granted to Attorneys under an LPA may be for the long term, but they are regulated by the Office of the Public Guardian (OPG), a government body. The OPG has a statutory responsibility to supervise those acting on behalf of others, to ensure they carry out their legal duties.

It’s fair to say that even at the height of the pandemic, when the OPG was under considerable pressure to speed up the registration process, they held back from wholesale digitisation and only allowed the witnessing and delivering of LPAs to be completed on paper. And for good reason. Checks at this stage give people time to think and check that everything is correct.

Further changes to the LPA system are set out in the new POA bill (currently in parliament), built on technological advances and should make the process easier and faster. Time will tell how this plays out, but it’s reassuring to see that great care is being taken to strike the right balance between digitisation with safeguarding those who have lost the capacity to manage their affairs.

And finally, it’s important to remember that It’s the person who makes the LPA who decides how it can be used and, in financial matters, when it can be used. The individual (not the Court) chooses their Attorney(s).

Our Advice

In some ways, drawing up an LPA is more critical than drawing up a Will. Without an LPA, dealing with your affairs is almost impossible if you lose mental capacity. In addition, your family must apply to the Court of Protection to make decisions about your health and welfare or access your money.

We strongly believe everyone should have LPAs in place, but they must be carefully drafted and checked. As a legally binding, complex document, it can be easy to get this wrong; that’s why we always recommend talking to a specialist lawyer.

So, if you want to stay in control, you must plan.  If you need further information, advice or an instant quotation, please get in touch with us. We’re here to help.

Please note that all views, comments or opinions expressed are for information only and do not constitute and should not be interpreted as being comprehensive or as giving legal advice. No one should seek to rely or act upon, or refrain from acting upon, the views, comments or opinions expressed herein without first obtaining specialist, professional or independent advice. While every effort has been made to ensure accuracy, Curtis Parkinson cannot be held liable for any errors, omissions or inaccuracies.

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