Introduction
A Lasting Power of Attorney (LPA) form replaced the Enduring Power of Attorney in October 2007. This new document is just one of the changes implemented by the Mental Capacity Act 2005.
The legislation is subject to the Law of England and Wales. Comparable powers already exist in Scotland under the Adults with Incapacity (Scotland) Act 2000.
Net Lawman supply a number of free articles on Lasting Powers of Attorney, the Mental Capacity Act, Wills and various other probate matters, as well as the documents themselves.
The Mental Capacity Act
The Act governs decision-making on behalf of adults who lack mental capacity, both where they lose capacity at some point in their lives, and where the incapacitating condition has been present since birth. It covers all decisions, including personal welfare, health, property and financial matters.
What is a Lasting Power of Attorney (LPA)?
An (LPA) is a new statutory form of power of attorney created by the Act. Anyone who has capacity to do so may choose a person (an "attorney") to take decisions on their behalf if they subsequently lose capacity. The LPA will replace the Enduring Power of Attorney (EPA) currently provided for by the Enduring Powers of Attorney Act 1985. Unlike an EPA, an LPA can extend to personal welfare matters as well as property and affairs.
Two different types of LPA are available:
1. Property and Affairs LPA
Choose someone to make decisions about how to spend your money, and the way your property and affairs are managed. Once registered, and unless you have put a restriction on it, this type of LPA can be used by your attorney(s) straight away.
2. Personal Welfare LPA
Choose someone to make decisions on your behalf relating to your personal healthcare and welfare. This includes decisions to give or refuse consent to treatment on your behalf, or about where you live. These decisions can only be taken on your behalf when the LPA has been registered and you lack the capacity to make the necessary decision for yourself.
The Key Principles
The legislation is based upon five key principles:
- the right of every adult to make their own decisions. They must also be assumed to have the capacity to make
such decisions unless it can be proved otherwise;
- the right for individuals to be supported to make their own decisions;
- individuals must retain the right to make what might be seen as eccentric or unwise decisions;
- anything done for or on behalf of people without capacity must be in their best interests;
- anything done for or on behalf of people without capacity should be the least restrictive of their basic rights and freedoms.
Creating a Lasting Power
Anyone aged 18 or over and who has the capacity to understand what it means may create an LPA. The power must:
- meet the prescribed form;
- stipulate whether the power covers personal welfare or financial affairs or both;
- set out any restrictions or conditions which the donor wishes to impose;
- must state that the attorney(s) is given authority to act when the donor no longer has capacity to make those decisions themselves.
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The powers within an LPA will always operate from the onset of the donor’s incapacity. It is also possible to grant powers relating to property and affairs, but not personal welfare that are effective whilst the donor still has capacity.
The donor can appoint one attorney or more than one. If two or more attorneys are appointed, the donor must specify whether they must act jointly, jointly and severally (i.e. they can either act together or separately) or jointly for some matters and jointly and severally for others.
The LPA must be signed by the donor and attorney(s) and then sent, by either the donor or attorney(s), to the Public Guardian for registration. If all requirements are met, the power will be formally registered.
Once registered, the attorney has the authority to act according to the specific terms of the LPA. Third parties dealing with an attorney should ensure that they see the registered power, or an office copy of that power, and that the attorney has the authority to act as proposed.
A donor may revoke their LPA at any time, provided they have the capacity to do so.
Note that the powers given in an LPA cannot be exercised until it has been registered. This should be contrasted with enduring powers of attorney where the power can operate before registration, provided the donor still has the mental capacity to make their own decisions, and where registration is only required following the donor’s mental incapacity.
Lack of Capacity
The Act goes to great lengths to define a person who lacks capacity. Some of the key points are:
- a person’s lack of capacity may be only partial or temporary;
- a person may lack capacity in respect of one matter but not others;
- the inability to make a decision must be caused by an impairment of or disturbance in the functioning of the brain;
- when determining capacity a decision should not be made merely on the basis of a person’s age, appearance or unjustified assumptions about capacity based on the person’s condition or behaviour.
If you are an attorney, it might be a difficult call to say whether or not the donor does lack mental capacity. If in doubt, get approval from a doctor.
Inability to Make Decisions
A person is considered as unable to make their own decisions if they are unable to:
- understand the information relevant to the decision;
- retain that information;
- use or weigh that information as part of the process or making the decision
or
- communicate the decision (whether by talking, using sign language or any other means
Attorneys: who can be one?
An attorney must be 18 or over. If the power relates only to the donor’s property and affairs, it is possible to appoint either an individual, unless they are bankrupt, or a trust corporation. For personal welfare powers, only an individual can act as an attorney.
An LPA for property and affairs is revoked if the attorney goes bankrupt. The one exception to this is where an attorney is the subject of an interim bankruptcy restriction order, in which case the power is suspended for as long as the order has effect.
Property and Affairs Decisions
Scope of Powers: These are similar powers to those allowed under an enduring power of attorney. They can cover operating a bank account, making investment decisions, signing tax returns and purchasing a property for the donor’s residence.
Gifts: For powers giving an attorney authority to deal with the donor’s property and financial affairs, there are gifting restrictions (similar to those for enduring powers). An attorney may only make gifts:
- on “customary occasions” (such as birthdays, marriage and Christmas) to persons, including the attorney, who are related or connected with the donor
- to any charity to whom the donor made or might have been expected to make gifts.
The value of such gifts must be reasonable with regard to the circumstances and, in particular, the size of the donor’s estate. The Court of Protection has the power to authorise more substantial gifts if satisfied that this would be in the donor’s best interests. This could include lump sum inheritance tax planning arrangements for donors with significant assets.
Other Restrictions: There are certain acts, which are considered of too personal a nature to be delegated to an attorney. These include:
- signing the donor’s will;
- taking on the donor’s role as a life tenant;
- acting as a personal representative of a will where the donor was named as executor;
- appearing in court, in the donor’s place, as a witness;
- acting as a trustee in place of the donor (although it is possible to delegate trustee functions for up to 12 months, using an appropriate deed, under the Trustee Act 1925).
Personal Welfare Decisions
Scope of Powers: This can cover matters such as where the donor lives, providing care and medical treatment for the donor and restraint of the donor.
Restrictions: Where an LPA authorises an attorney to make decisions about the donor’s personal welfare, certain restrictions apply:
- an attorney can only authorise restraint of the donor to prevent harm. The restraint must be proportionate.
- the attorney’s authority does not extend to making decisions in circumstances other than those where the donor lacks capacity
- the authority is subject to valid “advance conditions” made by the donor concerning the carrying out or continuing of a medical treatment
- an attorney may give or refuse consent to the carrying out or continuation of a treatment by a person providing health care for the donor but this does not extend to refusing life-sustaining treatment unless the LPA expressly says so and is also subject to any conditions or restrictions in the LPA.
Main differences in the legislation:
Registration - an EPA does not need to be currently registered with the Court of Protection unless or until the individual creating it loses mental capacity. LPAs will need to be registered with the Court from the point at which they are to be used, regardless of the individual's capacity.
The new regime will mean that an LPA cannot be used before registration. While this may prevent unauthorised use, it will also reduce the flexibility offered by EPAs, which allowed a donor to delegate some tasks while retaining responsibility for others.
Duress or undue influence - When creating a new LPA, a third party will need to certify that the person creating the power had the necessary capacity to sign, and that they did not do so under any duress or undue influence Health and welfare decisions.
Currently, EPAs are only effective for financial matters. Under the Mental Capacity Act 2005, individuals will be able to appoint attorneys to make health and welfare decisions. These new powers will allow an individual to confirm their right to refuse treatment. Sanctions will be imposed if these wishes are ignored and, in certain circumstances, the person responsible for ignoring these wishes could be committing a criminal offence.
The position on Enduring Powers
The old style EPA will remain effective but it will not be possible to create a new EPA. The Enduring Powers of Attorney Act is to be repealed from 1st October 2007. The Mental Capacity Act includes provisions covering existing EPAs which can still, whether registered or not, continue to operate beyond October 2007.
Relevant Documents:
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