Many people assume that if they become incapacitated, their spouse or closest family member will automatically have the legal authority to make financial and medical decisions on their behalf. This is a risky misconception. Without a legally binding document called a Lasting Power of Attorney (LPA), your family may face significant hurdles in managing your affairs, potentially leading to delays in critical care and financial instability.
MoneySavingExpert.com founder Martin Lewis said on his ITV television show: “I think Power of Attorney is more important than a will. A will decides what happens to your assets if you die. Power of Attorney what happens to your assets if you lose your faculties.”
What is a Lasting Power of Attorney?
An LPA is a legal document that appoints one or more individuals (your “Attorneys”) to make decisions on your behalf if you lose the mental capacity to do so yourself. This proactive measure ensures your wishes are respected and minimizes potential family conflicts.
There are two types of LPAs:
- Property and Financial Affairs LPA: this grants your Attorney the authority to manage your finances, including paying bills, selling property, and accessing bank accounts.
- Health and Welfare LPA: this allows your Attorney to make decisions about your medical care, daily living, and personal welfare.
Is a Lasting Power of Attorney like a Will?
No. An LPA applies to your affairs when you are alive and no longer applies after you die.
Do many people have LPAs?
Yes!
The OPG received 1.3 million applications in 2023/24 alone. The total number of LPAs and EPAs (Enduring Power of Attorneys) on the register is over 8 million.
Source: Office of the Public Guardian Annual report and accounts 2023 to 2024 (image below courtesy of this report)
Who should make an LPA?
While often associated with the elderly, anyone can experience an unexpected illness or accident that could leave them unable to make decisions. Establishing an LPA is a responsible step for everyone, regardless of age or health status.
TV personality Kate Garraway spoke on a TV documentary about caring for her husband, Derek Draper. Derek was seriously unwell with Covid but the couple did not have lasting powers of Attorney in place so Kate was unable to access the funds needed to remortgage or to even see her husband’s medical records (article here).
Key Benefits of an LPA:
- Access to finance: Provides your family access to your finances and ensures your wishes are respected.
- Protects your family: Minimises the stress and potential legal complications that your family may face.
- Facilitates timely care: Enables swift access to necessary medical treatment and financial resources.
What happens without an LPA?
Many people are surprised to learn that even a spouse or child do not have an automatic right to make decisions on your behalf if you are ill and unable to do so yourself. In the absence of having an LPA, your family can ask the Court of Protection will appoint a “deputy” to manage your affairs. This legal process is lengthy, costly, and potentially disruptive to your family.
These are the unwieldy and expensive steps that will need to be taken if you don’t have an LPA:
- Apply to a court (called the ‘Court of Protection’) to appoint a ‘deputy’ to make decisions regarding your health, care or finances;
- The scope of power granted to that deputy is dictated by the court and is often more limited than the scope of power under an LPA;
- The court process is expensive. In 2024, the fees are significantly more expensive than we charge to prepare a lasting power of Attorney:
- £408 to apply for deputyship
- £494 if the court decides your case needs a hearing;
- £35 to £320 every year for general supervision (applicable to most deputies)
- £100 assessment fee charged to you if you’re a new deputy.
- After you have paid the court fees, your deputy application may be refused by the court;
- The court may choose appoint the local authority instead of you or a family member.
- Potentially £000s if you require legal advice for the court process
These figures aren’t intended to scare you; we have included them in this article to encourage you to invest in the lower cost, broader and more flexible option of a lasting power of Attorney. Up to 2024, there have been over 8 million LPAs registered already by people who have chosen to invest in this peace of mind.
How much does a lasting power of Attorney cost?
They cost significantly less than a Court of Protection application. Our fees are here <link> and start at just £495 plus VAT – around 37% of the potential court costs and this is before any legal costs associated with the court application.
In addition to the legal fees, there is also a registration fee in England and Wales of £82 per document.
You can also prepare a lasting power of Attorney yourself for just the cost of the registration fees via the gov.uk website.
If your income before tax is less than £12,000 or if you are on certain means-tested benefits, you may be entitled to a reduction or exemption on those registration fees.
How long does it take to register a LPA?
The Office of the Public Guardian (OPG) aims to process applications in 8-10 weeks (though during busy times, this has slowed to 15-20 weeks).
Using a solicitor can help reduce the timescale as our experience advising on the application process can help remove delays for incorrect signing, missing information, or invalid witnesses, all of which can significantly slow down the registration process.
How do I choose my Attorneys?
You can appoint one or more Attorneys. These can be family members, friends, partners, or even professionals like solicitors.
Key Requirements for Attorneys:
- Over 18 years old
- Have mental capacity (sound mind and capable of making decisions)
- Not bankrupt or subject to a debt relief order
- Key consideration: Trusted by you to act in your best interests
- Note: Attorneys do not need to be UK residents or citizens, but it can be a logistical advantage to have at least one living close by.
Important Considerations when choosing Attorneys:
- Financial Responsibility: Assess your Attorneys own financial management skills. How are they with their own finances?!
- Level of Familiarity: Consider how well you know them and their values.
- Decision-Making Capabilities: Do you trust them to make sound financial and health-related decisions?
- Willingness to Serve: Ensure they are willing and able to take on this responsibility.
How do two or more Attorneys work together?
If you choose multiple Attorneys, you must decide how they will make decisions:
- Jointly: All Attorneys must agree on every decision.
- Jointly and Severally: Attorneys can make decisions independently or together. This is the most popular as it is flexible and potentially less time-consuming. Plus it means your LPA can continue if one Attorneys dies or is unable or unwilling to act.
- Hybrid – a mix of the arrangements above.
What can an Attorney not do?
There are limits to an Attorney’s power over your affairs:
- Paying themselves a fee for being an Attorney (unless they are a professional (e.g. a solicitor) or you have given them permission)
- Benefit personally from the position of Attorney
- Make gifts of money to people
- Combine their finances with yours – a separate bank account must be kept
- Any inheritance tax planning without authority from the Court of Protection
Do you have to register a lasting power of Attorney?
Yes, you must formally register the Lasting Power of Attorney by applying to the Office of the Public Guardian.
Should I use a solicitor for setting up a lasting power of Attorney?
It is not a legal requirement to use a solicitor but it could be beneficial to ensure no mistakes are made. In 2023/24, the OPG in England and Wales rejected over 50,000 applications (source: Which). LPAs are often set up at the same time as writing your will.
Can I amend or cancel my LPA?
- Cancellation: To cancel your LPA, you must submit a written “deed of revocation” to the Office of the Public Guardian (OPG).
- Attorney Changes: If your Attorney changes their name or address, they must notify the OPG and provide supporting documentation.
Does my LPA expire?
An LPA does not expire during the donor’s lifetime unless they actively choose to cancel it. The LPA remains in effect until the donor passes away.
Can you assist me with a Lasting Power of Attorney
Yes, our fees are listed here and you can contact us by telephone on 01937 227860 or email: philip@bostonspalegal.co.uk
Disclaimer: This article provides general information and should not be considered legal advice.
