A SYSTEM FOR PROTECTING THE VULNERABLE - LASTING POWER OF ATTORNEY
I recall the frantic phonecalls prior to 1 October 2007 from clients and enquiring members of the public regarding Enduring Powers of Attorney. Many had read in the press or just heard from others that “..they would not now be able to enter into such a document”; “…the new forms were so much longer and the procedure would be too complicated/expensive”; or even “is it true that my old form of EPA could no longer be used?”
The truth is that the “old style” Enduring Power of Attorney, provided entered into before 1 October 2007 remains valid, even if this has not yet been used or registered with the Court of Protection. There remains no need to register until such time as the Donor (the person who made the EPA) lacks capacity.
The new system introduced Lasting Powers of Attorney, which enables any person, 18 years and over, with capacity, to appoint a third party (up to 5 in number) to manage his or her affairs.
There are two types, the Property and Affairs LPA, which has a similar function to the old form Enduring Power of Attorney and which allows the Attorney to deal with the Donor’s finances and property and the Personal Welfare LPA. This latter document is newly introduced and has the potential to be very wide ranging. This document would enable the Attorney to decide on the Donor’s living arrangements, healthcare, who the Donor may have contact with, the Donor’s personal correspondence and arrangements for the Donor’s medical, dental or optical treatment. It can also be extended to allow the Attorney(s) to make decisions on whether to consent or refuse life sustaining treatment for the Donor. Obviously, this is a matter for the Donor to consider and discuss with both the Attorney(s) and their medical practitioner before inclusion.
Take an example:-
Arthur and Bertha are an elderly married couple in their 80s. They moved away to a picturesque seaside town 20 years ago upon their retirement. They own their own property – a two-bedroom bungalow with large garden situated close to amenities. They live comfortably on their joint pensions, savings and investments.
They have 5 adult children who visit them regularly, together with their own families. Their grandchildren are now establishing their own families.
The nearest family member lives approximately 30 miles away.
Arthur and Bertha’s health has deteriorated. Arthur had a nasty fall a couple of years ago and his general health and mobility has been seriously affected. He is unable to walk unaided and is increasingly reliant on social services for home nursing/care and transportation to and from his physiotherapy sessions at the local hospital. Bertha has attended him virtually single handed during this time but her own health is fading. She has noticed her husband has become quite forgetful and she finds it more difficult to attend to his needs.
Their children have concerns about the couple. They would prefer for their parents to move closer to them so they can share in caring for both parents. Whilst all the children and grandchildren agree on this, there is some disagreement how this is to be implemented, not least because two of their children tend to disagree just for the sake of it!
It has been agreed that they will sell up and go and live with one of their children. Part of the proceeds of sale is to be utilised toward the purchase of a larger property. Whilst this will also involve other aspects which the couple will need to consider, such as a possible Declaration of Trust and Wills, I will concentrate on the Lasting Power of Attorney.
Although Arthur is becoming forgetful, the likelihood is that he is still in a position to give instructions for a Lasting Power of Attorney. Arthur decides to opt for:-
A Property and Affairs LPA.
He appoints two of his children as Attorneys to manage his property and finances, with another to be appointed in the case of one or other of them being unable to act. He decides that they can each act individually for matters up to a value of ?2,000 and thereafter decisions must be made jointly.
Although he is still “on the ball”, he decides that he will want the LPA to take effect immediately, so that they can get to selling the property. The LPA must therefore be registered with the Office of the Public Guardian, before it can be used. Whilst he is mindful of the cost of care, he also wants his Attorneys to be able to make gifts, not only for birthdays and on the occasion of weddings but larger gifts so that he can take advantage of his Inheritance Tax Exemption and his ability to make lifetime gifts. He therefore wants provision for this in the document.
Personal Welfare LPA
This can only be used once Arthur lacks capacity and Arthur decides to appoint one of his children and a grandchild (wise beyond her years) as his Attorney. He would be living with this child in any event and had discussions with these two on his care, which he is confident that they will carry out. He decides not to extend their powers to enable them to decide whether to consent to or refuse life sustaining treatment. He did not think this would be fair.
Bertha also opts for both LPAs.
For her Property and Affairs LPA she has appointed the same Attorneys as Arthur but decides that its use should be postponed. Whilst the LPA will be registered, it is not to take effect until she lacks capacity.
In Bertha’s Personal Welfare LPA, she has opted for all of her children as Attorneys but with one child (with whom she will be living) to make general decisions. However, Bertha values her independence and has very strong views on being kept alive “on machines” or having no quality of life. She has had long discussions with children and grandchildren on this subject and told them in no uncertain terms of her views. She decides that all five children should decide on whether or not she is given life sustaining treatment. She also decides to leave an Advance Statement with the LPA “just in case they forget her wishes”. As a further safeguard, she decides that such a decision should be given by majority.
In truth the forms are longer, the procedure more involved than the previous system. Legislation has built in safeguards to ensure the system is not abused. All LPAs need to be registered before they can be used. The Public Guardian Office will notify those persons listed on the form (as provided by the Donor) of the application for registration and they will be given an opportunity to raise objections. There is an additional cost involved, not least the registration fee, currently ?150.00 per document. If you are on benefits you may be entitled to an exemption from the payment of the fee. The cost will be greater than for an Enduring Power of Attorney but what price for peace of mind!
As a reminder, the General Power of Attorney can also be used to allow a third party to act for a Donor. You must however bear in mind that this usually has a life of one year and cannot be used once the Donor loses capacity!