Why LPAs Are An Essential Part Of Later Life Planning

Last week, former Court of Protection judge, Denzil Lush, said he would never sign a Lasting Power of Attorney (LPA) because it can have a ‘devastating effect’ on family relationships.

Judge Lush, who was the senior judge in the UK Court of Protection until last July, said on Tuesday that people should be far more aware of the risks involved in LPA arrangements, and that he would never sign one himself. The Court of Protection becomes involved for those who are potentially vulnerable and need decisions to be made to safeguard their best interests but where they either haven’t the capacity to make an LPA or made an LPA that is being challenged or the suitability or decisions of the Attorneys are being investigated.

There are 2.5 million LPAs currently registered in England.

But are the highly esteemed, former judge’s comments entirely fair?  Are LPAs surrounded by adequate safeguards to protect the donor from abuse and families from falling out?  And if so, what is a solicitor’s role in ensuring the best interests of all involved are considered?

What is an LPA?

A lasting power of attorney (LPA) is a legal document that enables an individual (or ‘donor’) to appoint one or more people (known as ‘attorneys’ or ‘donees’) to make decisions on their behalf.  LPAs were introduced by the Mental Capacity Act 2005, and replaced the old Enduring Powers of Attorney (EPAs) from 1st October 2007.

There are two types of LPA:

  • property and financial; and
  • health and welfare issues

A property and financial LPA provides that the appointed attorneys can make financial decisions on behalf of the donor and manage their money and property.  For example, with a property and financial LPA, an attorney could take the following actions on behalf of the owner:

  • pay household bills
  • manage buy-to-lets and overseas properties
  • manage share portfolios (including buying and selling)
  • buy and sell property

A health and welfare LPA allows an attorney to make decisions on the donor’s medical care and day-to-day life.  For example, through an LPA, the donor could allow their attorney to:

  • administer medication
  • buy clothes and care items for the donor
  • decide on the donor’s diet and exercise
  • decide on the type of medical care required for the donor
  • select a nursing home and decide if and when the donor should move in
  • decide on end of life care

What must a valid LPA must contain?

A valid LPA must satisfy the following criteria:

  • it must be created when the donor has mental capacity to understand the effects of the LPA
  • the document needs to be in writing and in the prescribed form
  • the document must include information about the nature and effect of the LPA
  • the donor must sign the LPA to demonstrate their intent for it to apply when they no longer have capacity
  • the attorney(s) must also sign the LPA to demonstrate they understand their duties, particularly to act in the donor’s best interests
  • a certificate provided by a third party, such as a solicitor, must be included to state the donor has capacity at the time the LPA is signed and to ensure that no undue influence is being exerted on the owner
  • the LPA must be registered with the Office of the Public Guardian before the attorney(s) can act.

There is now an optional requirement to name people (not the attorney(s)) who may be interested in being notified about the application to register the LPA.  For example, family members such as the donor’s siblings may wish to know when the LPA has come into effect.

Who can be an attorney?

The donor can choose to appoint any number of attorney’s, although the higher the number the more difficult it can be effectively to manage the donor’s affairs. If more than one attorney is appointed, the donor must decide when creating the LPA whether the attorneys are to act jointly, jointly and severally, or jointly in some matters and jointly and severally in other matters.

Choosing the right attorney(s) is a vital part of setting up an LPA.  Judge Lush’s main concern with LPAs is the lack of safeguards protecting donors from fraudulent actions by their appointed attorneys.  However, by investing in quality legal advice, these concerns can be heavily mitigated.

How does an experienced solicitor help ensure donors and their families are protected when putting together an LPA?

It is a solicitor’s job to ensure that the best interests of the donor are protected when they create an LPA.

An experienced solicitor will work closely with the donor and their family when drafting and advising on an LPA.  When instructing a qualified private client solicitor, you can expect:

  • the solicitor to hand draft the LPA, after carefully listening to your requirements, as opposed to the document being created by computer software
  • advice on how to select your attorneys, including information on the qualities required and an honest evaluation of the capabilities and trustworthiness of the attorneys selected
  • information and advice provided to the attorneys about their duties, and the limitations on them set out in the LPA
  • guidance on the importance that the attorneys act in the best interests of the donor and advice as to how this is achieved
  • brief the Attorney on their task, responsibilities, the limitations of their authority and how to formulate ‘best interest decisions’.

Concluding comments

By 2021 there will be over one million people in the UK suffering from dementia.  1 in 20 people over the age of 65 years will develop dementia, and this figure continues to rise with age, with 1 in 5 people over 80 years suffering from the disease.

Given these figures, LPAs will become more important than ever, helping those who are in the frightening position of not being able to manage their own affairs be cared for by those who love them.

Chris Keenan, a director of the national organisation Solicitors for the Elderly, believes LPAs are effective safeguards when created responsibly. He commented: “Senior Judge Lush’s comments have given rise to fears that LPAs are a direct avenue for financial abuse. However, his comments must be put into context, as his 20-year career at the Court of Protection will have presented him with the very worst cases of financial abuse.

“An LPA can be a positive and effective legal tool, which can help ensure your wishes are respected should you ever lose capacity. Senior Judge Lush’s comments should highlight the clear need for professional advice when considering powerful legal documents of this nature.”

If quality legal advice is invested in when creating an LPA, the document acts as an essential tool for later life planning, providing the donor and their family with peace of mind.

Bennett Griffin are award winning solicitors based in West Sussex with offices in central Worthing and Ferring.  Our experienced and specialist solicitors offer a comprehensive service and will work with you in an honest, considered, and practical manner.  Our Specialist Power of Attorney Team can advise and assist you in relation to making an LPA.  Please contact Gema West on (01903) 706985, Lucy Nevill on (01903) 706994, Shannon Brightman on (01903) 706987, or by email at gw@bennett-griffin.co.uk or ln@bennett-griffin.co.uk for more information, quoting LPA2.

The information contained in this article is for general guidance only and is not intended to be legal advice. Professional advice should always be taken on the application of the law in any particular situation.