‘I’m an expert – what to know about Lasting Power of Attorneys and mistakes to avoid’
Nearly 30,000 Lasting Powers of Attorney applications were rejected by the Office of the Public Guardian in the last year due to mistakes, a Freedom of Information request has found.
The data obtained by wealth manager Quilter in July found the figure of rejected applications stretched even further to a staggering 128,000 since 2018.
A Lasting Power of Attorney (LPA) plays a vital role in protecting a person’s estate – and well-being – making it vital to get the application right from the off. Express Money spoke to an expert to find out the procedure, as well as the pitfalls to avoid.
Kristina Dunne is a senior associate solicitor and leader of the lifetime team at Hedges Law. Explaining the objective of the document, Ms Dunne told Express.co.uk: “A Lasting Power of Attorney is a legal document that allows you (the donor) to appoint attorneys who will make decisions on your behalf if you are no longer able to do so in the future, perhaps after an accident or if you lost capacity in later years.
“Your attorneys may need to make decisions about your property, finances and most importantly, your health and welfare. An LPA allows you to choose who you want to make these decisions on your behalf – and that’s the protection and control that an LPA provides.”
LPA: It’s important to appoint attorneys who you trust “implicitly”
What are the different types of Lasting Power of Attorneys?
According to Ms Dunne, there are two types of LPA – health and welfare, and property and financial affairs.
Ms Dunne said: “When you appoint a health and welfare attorney, you are choosing the person you wish to make decisions regarding your medical care and how you will be looked after. A health and welfare LPA can only be used if you have lost full mental capacity. Unless this is the case, you will continue to make decisions yourself.”
She added: “You should designate a trusted person who understands your healthcare preferences, values, and wishes. ”
Meanwhile, the attorney for property and financial affairs will be the person that will make decisions about a person’s money and assets. Instances could include making a decision on whether a property should be sold to pay for a person’s care or how their money can be spent to support their best interests.
Ms Dunne said: “You can decide when you would like your property and financial affairs attorneys to step in and act for you, whether this is only if you have lost capacity or while you still have capacity but with your consent. If you wish, you can appoint the same people for both.”
People must register their Lasting Power of Attorney forms with the Office of the Public Guardian
How do you create a Lasting Power of Attorney?
To create an LPW, people can fill in the required forms on GOV.UK and then register their forms with the Office of the Public Guardian (OPG), which according to Ms Dunne, can currently take up to 20 weeks.
However, Ms Dunne noted: “You can also instruct a solicitor to do this for you, and they will assist you by providing legal advice throughout the process. It is common for people to make mistakes on these forms, such as not getting them witnessed properly, leading to the OPG rejecting them. This can be frustrating as you will then need to start the process again.”
What are the common mistakes when creating an LPA?
Firstly, Ms Dunne said that each signature page of the document must be signed, witnessed and dated in the correct order.
There is a process to follow and the OPG will not register the document unless it has been completed correctly. Ms Dunne added: “It’s also important that you fully understand the power that you will be giving to your attorneys, to ensure that you choose the right people. Sometimes the people closest to you may not be the best people for the role.”
For example, Ms Dunne said: “You might want to appoint a close relative, but they live abroad. Will it be practical for them to make decisions on your behalf, and do they know you the best? Take the time to consider your options and remember to update your LPA if your relationship changes.”
LPA: Each signature page of the document must be signed, witnessed and dated
Can a Lasting Power of Attorney be terminated?
While a person still has the capacity to make their own decisions, they can revoke their LPA at any time by preparing a Deed of Revocation. Ms Dunne said: “You must send the original LPA along with the Deed of Revocation to the Office of the Public Guardian (OPG).”
If only one attorney is appointed and they lose capacity, become bankrupt, are removed by the Court of Protection or pass away, the LPA will come to an end. If the sole attorney is the person’s spouse or civil partner and they divorce or end their civil partnership, their LPA will also come to an end.
Ms Dunne said: “Your LPA allows you to decide how your attorneys will act and it is advisable to obtain legal advice regarding this. If you have appointed more than one attorney to act jointly and one attorney cannot continue to act, the LPA will come to an end even if you have another attorney in place. The alternative is to consider appointing them jointly and severally.”
In the event of misuse, what safeguards are in place?
Attorneys have a legal duty to act in the donor’s best interests and exercise their authority with good faith, loyalty, and honesty.
When the LPA is created, Ms Dunne said: “Your certificate provider will have to be satisfied that there is no undue influence and coercion, you understand the document and the purpose of making it and that you have full mental capacity.
“It is crucial that you only appoint attorneys who you trust implicitly. You will be able to include restrictions depending on your circumstances, which will limit what your attorneys can do or require further steps to be taken, for example obtaining a mental capacity assessment, before they are able to carry out certain actions, for example selling your house.
“It is important for any suspicion of misconduct to be reported to the OPG as soon as possible to enable them to investigate. There are various ways to contact them and details can be found on their website.”
Can an LPA be amended?
An LPA is a legal document and so if any amendments are required, the formal process must be followed.
Ms Dunne said: “The OPG should be provided with details of the change of address and change of name for both you and your attorneys. Similarly, if one of the attorneys has died, the OPG should be notified as soon as possible.”
Ms Dunne noted: “It is not possible for attorneys to be added to an LPA and if you would like to add an attorney, you must revoke your current document and make a new LPA.”
However, she said: “It is possible to remove an attorney by making a Partial Deed of Revocation, which must be sent to the OPG with the original LPA.”
As an associate member of STEP, the global body of trust and estate practitioners, Ms Dunne specialises in Wills, Succession Planning, Lasting Powers of Attorney and Court of Protection Work.