Lasting Powers of Attorney

A Lasting Power of Attorney referred to as an LPA, is a document which allows a person to choose someone else to manage their affairs for them. The person creating the LPA is the ‘donor’. The person chosen is known as an ‘attorney’.

What is an Attorney?

Under an LPA the attorney appointed can be a friend, relative or a professional person.

Who the attorney is and how much power they have is entirely up to the donor. However, as an attorney you must always be acting with honesty and in the best interest of the donor.

The donor has the power to appoint more than one attorney. If there is more than one attorney, the LPA will say how the attorneys should act together. This will be one of the following:-

• Jointly and severally – one attorney can make a decision on behalf of all attorneys; or
• Jointly – all attorneys must agree to every decision; or
• Jointly for some decisions and jointly and severally for others – this is a hybrid of the jointly and severally and jointly approach. The donor will specify in the LPA what decisions that attorneys can make jointly and severally and which decisions the attorneys must make jointly.

The powers provided to the appointed attorneys will depend on the type of LPA the donor is creating, which will be either an LPA for Property and Financial Affairs, or an LPA for Health and Welfare.

Property and Financial Affairs LPA

What can Attorneys do?

Provided there are no restrictions within the LPA, an attorney will usually have the power to do the following:

• Sell property (at market value);
• Buy property;
• Maintain and repair the donor’s home;
• Rent out property (although attorneys do need to consider whether once the property has been rent and liabilities have been paid (such as income tax, management fees, insurances, general maintenance and repairs) the remaining funds are sufficient for the donor’s needs);
• Manage bank accounts;
• Deal with investments;
• Pay bills;
• Claim benefits on behalf of the donor for their use;
• Liaise with HMRC regarding the donor’s tax position;
• Purchase items needed for the donor; and
• Make gifts (however there are strict rules around this so professional advice should be sought on the individual circumstances).

What can’t an Attorney do?

• Make large financial gifts to people if there is not a pattern of the donor doing this (however, as mentioned above, professional advice should be sought on the individual circumstances);
• Manage discretionary funds with a fund manager;
• Pay yourself a fee (unless authorised within the LPA);
• Mix the donor’s finances with their own;
• Attorneys must not use their position to benefit or make a personal gain;
• Attorneys must not purchase something from the donor at a below market rate without the Court of Protection’s authority; and
• Attorneys cannot undertake tax planning without the Court of Protection’s authority in some circumstances.

Health and Welfare LPA

What can Attorneys do?

It is important to note that an attorney can only act under a Health and Welfare LPA when the donor has lost capacity to make decisions. If that is the case and provided there are no restrictions within the LPA, an attorney will usually have the power to do the following:

• Decide where the donor lives;
• Make decisions about medical treatments the donor receives;
• Decide on the donor’s day to day routine;
• Make decisions about the donor’s personal care; and
• Give or refuse life sustaining treatment;

What can’t an Attorney do?

• Make decisions that restrict the donor’s freedom.
• Make decisions when the donor still has capacity.
• Make assumptions about the donor’s capacity based on age, behaviour, condition or appearance.

The information contained in this update is for general information purposes only and is not legal advice, which will depend on your specific circumstances.