Increased Awareness of LPAs
Ten years after their introduction as replacements for the Enduring Power of Attorney, the Public’s awareness of the implication, benefits and value of having Lasting Powers of Attorney has increased substantially during the past few years.
Almost everyone has unfortunately experienced the effect which becoming either physically, or mentally, incapable of managing their own affairs may have on the lives of a loved one.
The common myth surrounding Powers of Attorney is that they are primarily for the benefit of older members of our Society, and whilst the increased awareness of Dementia and Alzheimer’s has highlighted the consequences of these awful medical conditions, the importance of having a Power of Attorney is equally relevant for people of all ages. For example, a serious accident can suddenly render a person, whatever their age, incapable of either physically, or mentally, managing their own affairs in the future.
The introduction of the Enduring Power of Attorney (EPA) in 1985 was a giant step towards addressing a huge problem which faced families whose loved one suddenly became incapacitated in such a way. Before 1985, a Power of Attorney was only valid for a period of 12 months from the date of its execution. This could cause obvious problems if there was a need to use one but the Power of Attorney had expired.
The introduction of the EPA addressed these main weaknesses – hence its excellent choice of terminology – in that the EPA would ‘endure’, or last, forever unless revoked, thus avoiding the possibility that, just when needed, it had expired!
In addition, the EPA had an invaluable second string for the benefit of close relatives and Practitioners alike, in that, if one existed, and the Donor (the person making the Power) lost his or her mental capacity, the Attorney had a legal obligation to register the EPA with the Court of Protection, whilst continuing to act in accordance with his or her appointment at such a critical time.
The EPA’s main attributes were that it was, relatively cost effective if prepared by lawyers (£100-£150 each), and, more critically, you had no obligation to register it at the outset – only if the Donor lost mental capacity – and therefore the payment of a registration fee was not compulsory. Overall, its aims and objectives were entirely satisfied – it was immediate, cost-effective, and would continue to be valid should the Donor lose mental capacity. Astonishingly, therefore, (and this is strictly a personal view) the Enduring Power of Attorney was replaced in 2007 by Lasting Powers of Attorney.
One can only surmise that the reasons for doing so were the potential dangers which the EPA posed to “vulnerable adults” in that it could be used immediately, and without the opportunity for anyone to object to the appointment of the Attorney. There was also an increased need for an Attorney to be specifically appointed to deal with Health and Welfare issues of the Donor, as well as an increased public awareness that it was not a close relative (or “the next of kin”) who had the legal right to make decisions involving the termination of ‘life sustaining treatment’ for the Donor, but a decision for the medical profession.
The introduction of the LPA brought the Power of Attorney process in this country closer in line with the well-established procedure followed when an application is made to the Court of Protection for the appointment of a “Deputy” to manage the affairs of an individual who has lost his/her mental capacity when there is no valid EPA or LPA in existence.
This process introduced the current requirement of a need to notify a third party of the Donor’s intention of executing an LPA and advising of the identity of those chosen Attorney(s). This, technically, gives the Donor the opportunity of notifying a close friend or relative (who has not been appointed as either an Attorney, or Replacement Attorney) of his intentions, and the procedure allows this third party the right to object directly to the Office of the Public Guardian (“OPG”), if the person being notified is of the view that the Donor is either making a mistake or is being unduly influenced.
It is the writer’s personal view that this part of the process is not as robust as may have been intended, as it does not guaranteethat the notification process is followed correctly or as original intended. If a fraudster is intent on defrauding an individual of his/her funds then the Donor could, in such circumstances, be encouraged by the fraudster to nominate an accomplice of the fraudster as the person to be notified, such as a relative of the fraudster who may have a different surname to the Attorney (such as the attorney’s married sister)!
The ability for anyone to draw up an LPA downloaded from the Internet, creates the huge risk that the Donor may not receive the essential advice of a specialist lawyer with regard to the full implication of these powerful documents. A Solicitor has, of course, a professional duty to ensure that the Donor fully understands the implication of any legal document, how powerful it is, and how dangerous it could be in the wrong hands. It is my personal view that a Solicitor can provide invaluable advice in cases where, for example, the Solicitor is aware of the potential problems which the Donor’s appointment of a particular Attorney – for entirely justifiable reasons – may create. Most common is the potential dispute between siblings and, in particular, those siblings not appointed by their parents as Attorneys for perfectly genuine reasons.
The Solicitor should use the notification process in the manner in which it was intended, and ensure that the persons to be notified in such cases are the other siblings, or at least one other sibling or close relative, who would then be free to object if he or she felt that the Donor was making a mistake. My view is that if a sibling in such circumstances wishes to object to the appointment of one of his/her other siblings as a Parent’s Attorney, then they should be given the opportunity to object and should be made aware that another sibling is intending to be appointed as their Parent’s Attorney.
Unless such an objection is justified, and the Objector can show that the Attorney is not suitable or likely to act in the best interests of the Donor, such as due to his/her previous bankruptcy, criminal record, or other inappropriate conduct, then the appointment would be authorised by the Office of the Public Guardian and the objection rejected.
My experience and advice in such cases is to notify those you think may, or may be threatening to, object – then that potential objector has to be confident that his/her reasons are justified and are likely to be upheld. If they are objecting purely for reasons of jealousy, then their objection will fail as, after all, the decision on who to appoint is entirely that of the Donor.
A large percentage of these cases are defused at the outset as there is usually a justifiable reason why certain siblings may be appointed and others are not – commonly some do everything for their parents, whilst others do little, or nothing – yet those who do little may still expect to be appointed as Attorneys and given the same responsibilities as those siblings who willingly, and voluntarily, take on these responsibilities without hesitation.
All this emphasises the need to take specialist legal advice. It is an experienced Solicitor, specialising in this area of law, who would advise you to ensure that the correct people are notified in order to remove any prospect of objection from such individuals at the outset, rather than hide the appointment from those who may otherwise have objected. After all, that is what the process is designed to ensure, namely the protection of the Donor, and it is the Advisor’s responsibility to ensure that there are no disputes or conflicts in the course of exercising these duties on behalf of the Donor. All energies should be devoted to looking after the Donor’s affairs and acting in the Donor’s best interests, not creating suspicion and distrust between members of the family.
What should happen of course is to bring the process in line with Court of Protection applications and to make it compulsory that a complete ‘Group’ of interested parties are notified to ensure that the relevant ‘next of kin’ are aware of what is being proposed. In the majority of cases it is some, or all, of the children of the Donor who are being appointed to formally give them the legal right to do what they may have been doing for some time, but without a formal legal document authorising them to do so. This would avoid “anyone” being notified – which is not really the intention – and ensuring that the closest relatives are notified as a matter of standard procedure, and would ensure that a number of objections, if valid, were raised at the outset, or alternatively, certain siblings would be sure to know if another sibling had applied to be the Parent’s Attorney.
Such Notification may cause disharmony amongst family members at the very outset, but does clear the decks for future dispute-free management of the Donor’s affairs, as any arguments are undertaken, exhausted, or ideally resolved, at the outset before the LPA is registered and capable of being used.
The Health and Welfare LPA
The introduction of Lasting Powers of Attorney in 2007 also involved a major new concept – the Health and Welfare LPA.
Whilst the need for a ‘Property and Financial Affairs’ LPA was obvious, and predominantly the reason why Donors had executed EPAs prior to 2007, the full impact, and value, of the Health and Welfare LPA, was unclear initially on its introduction in 2007.
Briefly, the Health and Welfare LPA authorises the Attorney to deal with all matters involving the medical and welfare issues of the Donor. This includes a specific section within the LPA – and the subject of a separate Option within the document – granting the Donor the opportunity to authorise, (or not as the case may be), the Attorney to give a direction for the “ceasing of life sustaining treatment.” This addresses the recognition in 2007 that it was the medical profession who were legally entitled to decide as to whether life sustaining treatment was to cease, and accordingly a Donor may now authorise his Health and Welfare Attorney to make such a legally binding decision regarding “life sustaining treatment” on the part of the Donor.
The second arm of the Health and Welfare LPA is that of the Donor’s ‘Welfare’. This involves the arrangements made for the Donor’s Care, and covers such matters as Nursing Home Care, packages for Care in the Home, and dealing with Social Services generally.
Over the past few years it has become clear to me that an Attorney’s relatives trying to persuade Social Services to, for example, increase Care packages for Donors, have a greater say in matters if they have been formally appointed as Health and Welfare Attorneys. I have seen cases, in the past few years in particular, where close relatives have been unsuccessful in persuading Social Services, for example, to increase Care packages for their relatives, as they had not been appointed as Health and Welfare Attorneys.
In times of increasing costs and the substantial lack of funds on the part of Local Authorities to fund such Care costs, securing such increased Care packages will inevitably become increasingly difficult, and such requests will be met with increased resistance often due to a lack of funds. If a relative is appointed as a Health and Welfare Attorney, this will give the Attorney a greater say in matters involving the welfare of the Donor – whilst, not guaranteeing that success will inevitably follow.
Rightly or wrongly, and in the interest of limiting costs for the Donor, there was initially a tendency to focus on just the one LPA which all Donors require – the Financial and Property Affairs LPA. Increasingly, however, Donors should be advised to consider the critical importance, and need, for a Health and Welfare LPA.
Who Do You Appoint?
Having decided on whether you need one or two LPAs, attention should then be given to whom you wish to appoint.
Often, the candidates pick themselves, as they are often those children or relatives who have already been caring for, or managing, the day to day needs of the Donor.
You are advised to consider appointing more than one Attorney to ensure that, if your Attorney pre-deceases you, or loses capacity, then there is no need to have to go through the whole costly process all over again. Indeed, one of the genuine improvements under this new process is the facility within the documents to appoint, or nominate, ‘Replacement Attorneys’ in the event that your Attorney, or Attorneys, may have either pre-deceased you, or are not able to carry out their duties as your Attorney, for whatever reason.
If you have suitable candidates for being ‘Replacements’ then you are advised to appoint them at the outset in order to cover this future possibility – often grandchildren are suitable Replacements for their own parents, as of course they are the most likely individuals to carry out the responsibilities previously undertaken by their parent or parents, as Attorneys, for their grandparents.
Anticipate the Delay in Registration
A critical change in the process is the compulsory requirement to register the LPA first and before it is valid and capable of being used. This registration process inevitably involves a fee – which paid for the creation of the Office of the Public Guardian and its almost immediate relocation from London to Birmingham – and the cost of processing every LPA executed in England and Wales. Originally the registration fees were a prohibitive £150 each. These were subsequently reduced to £130, then reduced further to £110. On 1stApril 2017 the fee was reduced to the current fee at the time of writing (June 2018) of £82 per LPA.
Combined with the need to notify at least one person of your intention to execute an LPA as above, this need to register the document first results in the registration process for most applications taking up to 3 months from the date of their execution and before they can be validly used by the Attorney.
It is the writer’s opinion that this is the major retrogression in the current process. Some Attorneys, desperate for the need to process matters legally for their Donors, are unable to do this for at least 3 months – and in some sad cases the Donor has died before the LPA is actually registered at the OPG – and in such cases, of course, your registration fee is not refunded!
In cases where Donors are terminally ill, it is often a dilemma as to whether to submit an application, but most are submitted in the hope that the Donor will indeed survive the registration process. From the point of view of close relatives and the legal Practitioner, this delay is unfortunate and the source of some practical difficulties. Protecting the small percentage of “vulnerable” people who could be abused by fraudulent Attorneys who would be looking to take advantage of the fact that the LPA’s predecessor, the EPA, was effective from the moment it was signed, has its price – namely, delay, where, in the majority of ‘ordinary’ cases, loved ones are in need of an ‘immediate’ solution to their problem.
The current process involves a period of up to 3 months before the LPA is registered. I believe that the OPG are trying to address these timescales with the reduction in the statutory notice periods and the reduction in their own turnaround time, but the time delay remains a critical issue in some cases when deciding whether an application should be made, and such costs incurred.
A Solicitor is obliged by his Professional Conduct Rules to satisfy himself that the Donor is of sound mind and also fully understands the importance and implications of these very important and far-reaching documents. If the LPAs are prepared by a Solicitor specialising in this field then there is no question that both of these essential criteria are satisfied.
If a third party downloads the form and invites the Donor to sign without any detailed knowledge on the part of either party as to their legality and impact, then the Donor is severely at risk!
In an attempt to address the risk of Donors being invited to sign documents without the necessary checks on their mental capacity or understanding the full implications of the documents they are signing there incorporated within the LPA document a ‘Certificate’ which is required to be signed by a ‘Certificate Provider’, who verifies that the Donor is of sound mind, has the capacity to enter into the LPA, and is fully aware of its meaning and impact. It is for this reason alone that Donors should consult a specialist Solicitor in this field before executing these documents.
Once registered, the LPA is valid for the lifetime of the Donor, unless subsequently revoked. Existing Enduring Powers of Attorney remain valid unless revoked.
This gives the Donor and Attorney peace of mind that, whatever the Attorney may encounter in the future, the Attorney has the legal right to deal with the Donor’s affairs in respect of both his/her Property and Finance as well as, critically, matters involving the Donor’s Health and Welfare.
Whilst the current LPA process may be more costly than its predecessor, the importance of these documents cannot be underestimated and the overall savings in time, frustration and the ability to legally deal with the Donor’s affairs when necessary, is often unquantifiable.
At Emyr Pierce Solicitors we recognise the importance of these documents and their potential cost to the Donor and that these costs may prove to be a deterrent.
Emyr Pierce is a Solicitor with particular expertise in these matters. He offers a clear, and detailed explanation, for both Donors and Attorneys, as to all aspects of the process, and has introduced cost effective fixed price packages for individuals and married couples with an emphasis on the need to process applications as quickly as possible.
We adopt a pricing structure based on the time taken to, advise initially, and then prepare the documentation. We offer fixed price packages for individuals and married couples.
We charge a nominal additional fee for a second LPA as we believe it is in the best interest of all clients to execute both LPAs. We cannot legislate for the registration fees payable at any one time and these fees are payable in advance. The welcome reduction in registration fees has, however, helped somewhat in this regard.
For an individual executing two LPAs the registration fees would now be £164, with £328 for a married couple executing two LPAs each. You are of course free to execute just the one LPA, but increasingly we take the view that the Health and Welfare LPA is becoming just as valuable and important for relatives as the more obvious benefits provided by the Property and Financial Affairs LPA.