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Lasting Power of Attoneys - What Happens When Things Go Wrong

What is Lasting Power of Attorney?

A Lasting Power of Attorney (LPA) is useful tool when people become incapable of running their own financial affairs.

An LPA allows someone,(of the donor’s choice) to step in and take control of the donor’s finances. Because of the great power the LPA gives them, attorneys are often trusted friends or family of the donor.

People given formal powers under LPA to make decisions on behalf of adults who lack capacity are bound by law such as the Mental Capacity Act and its Code of Practice.

The attorney must always comply with the law and act in the person's best interests.

Adults who lack capacity and do not have such formal arrangements and require significant decisions to be made may be subject to a best interests meeting, or the issue may need to be taken to the Court of Protection. 

The court may appoint a deputy to act as decision maker or make a declaration about what is in the person's best interests and this can involve more legal costs.

What are the formalities?

There are two types of LPA: personal welfare and property and affairs.

LPAs are legal documents and are only valid if completed on the statutory form LPAs must be signed by the donor LPAs should normally name people who should be informed when it is to be registered LPAs must contain a certificate completed by an independent third party LPAs must name the person (or persons) who is to act as attorney

LPAs must be registered with Office of Public Guardian (OPG) before they can be used.

The attorney must follow any instructions the donor included in the LPA consider any preferences the donor included in the LPA help the donor make their own decisions as much as they can make any decisions in the donor’s best interests

You can appoint more than one attorney who can act:   ‘jointly’ - this means all the attorneys must agree or ‘jointly and severally’ - this means you can make decisions together or on your own

Why Is It needed?

A LPA  enables one to such things as deal with their own bank accounts or do any other financial transactions or to give instructions on what you would like to happen if you are ill.

The main problem is that If you lose mental capacity, unless you've already filled in the Power of Attorney forms, your loved ones will need to apply through court to become 'deputy',

You can only set up a Lasting Power of Attorney when you have mental capacity.

Once you've lost capacity, it is too late. If the donor has lost capacity but did not set up the LPA in advance, it gets more difficult.

 What are the pitfalls ?

There are strict requirements for the signing and witnessing of LPAs and the case discussed below highlights the need for care which can lead to errors in completing the documents. 

Mistakes can also be made in dates of birth being incorrect or missing, names being spelt incorrectly, addresses being spelt incorrectly, post codes being wrong, and the witness not being an appropriate person.

 Although LPAs can be very useful, there are potential problems arising from their operation. Many of these can be avoided with the correct advice in preparing your LPAs.

When a donor is unwell, or losing their mental capacity, family members who are not appointed as attorneys might sometimes try to make complaints on the donor’s behalf.

This could be because they believe that someone has misled the donor – by mis-selling an investment, for example. They might also object to the actions of the attorneys themselves.

Sometimes other relatives may not be happy with the way the attorney is behaving and will make a complaint on this basis..