Powers of Attorney
Most things in law have a definition by statute or by a judge, but this is not so for powers of attorney. However, most people have a good idea what one is. It is a document in the form of a deed by which one person authorises another to act on his/her behalf and in his/her name - either generally or for a specific purpose. It enables one person (attorney) to act as agent for another, when delegation is possible.
At present there are two main types:
In our practice we do sometimes prepare general powers of attorney, but the most common and most useful type is the Lasting Power of Attorney (LPA) - Property and Affairs.
- General Power of Attorney; and
- Lasting Powers of Attorney.
These powers can extend to decisions about medical treatment for a person who becomes incapable of communicating their own wishes. This is called a Personal Welfare LPA.
Do I need to Make a Lasting Power of Attorney?
It is highly recommended for all, especially those over 50 but not exclusively.
What would happen if through long life, accident, injury or mental deterioration you became unable to deal with your own financial affairs? The answer is not a palatable one, because it involves the Office of the Public Guardian - and a slow, tedious, longwinded and expensive process to obtain power to act for the affected person. If a LPA is in place, it enables a much simpler route to enable matters to be dealt with by the attorney.
A LPA is completed in a standard form laid down by law. You can choose who you wish to be your attorney, and give power to more than one person (to act together or individually).
The LPA can become effective straightaway, or be put in place as a precaution for the future. It can be cancelled at any time whilst mental capacity remains. To be effective so that it can be used, an LPA has to be registered with the Office of the Public Guardian (OPG). The OPG fee to register is £110. There can be a fee exemption where an individual is in receipt of certain benefits (such as guaranteed credit element of State pension credit, housing benefit or council tax reduction/support (not the 25% single person discount). A 50% fee remission is available if an individualís gross annual income (from all sources) is less than £12,000.
When should I make a LPA?
It is expedient to make a LPA at the same time as making a will. The fees will be lower if a separate appointment is not required However, any time whilst in good mental health is an ideal time and the sooner the better.
Many firms of solicitors charge in excess of £500 for a standard LPA. We charge a more reasonable £300 plus VAT. This fee was reduced by £50 plus VAT in 2015 when the LPA form was simplified slightly.
Or if at the same time as making a Will, the cost is lower - standard LPA £250 plus VAT.
What if mental capacity of the donor is lost?
A general power lapses in these circumstances, and recourse has to be made to the Office of the Public Guardian (Court of Protection).
An LPA can still be used provided it has been registered.
An Enduring Power of Attorney or EPA (made prior to 1st October 2007) continues to be effective after loss of mental incapacity to manage financial affairs, but for full power to continue there has to be an application for registration of the power with the Court of Protection. We can assist with the registration process, but fees are best discussed on a case by case basis.