LPA issues – Part 1

18 Jul

Lasting Power of Attorney issues – Part 1

When people draft LPAs, there are some common errors that are made. When they are sent for registration to the Office of the Public Guardian (OPG), I’ve been advised that they take a fairly robust approach and if they have any issues, will ask the Court of Protection (COP) to sever them, ie remove them from the LPA; this will allow everything else in the LPA to stand. When the OPG do this, they send notice to the correspondence address in the registration form to let them know of the intention to sever.

Once notice of intention to sever has been received the donor (if they retain capacity) can then decide to allow the severance or to create another LPA without the offending clause, but at the cost of another registration fee (currently £130).

The COP have therefore created a top 20 list of the most common reasons for severance of a provision. I’ll deal with them in batches, but here goes for the first set:

Provisions that are incompatible with a “joint” or “joint and several” appointment. So the first thing to do is explain what that means. When attorneys are appointed jointly, it means that they all have to sign to agree to something. This can be very restrictive and as soon as something happens to one of the attorneys, then the substitute attorney/s take over. Jointly and severally means that any one of the attorneys can sign, which means that if one attorney is for example on holiday or unwell, but not subject to a terminating event (death, mental incapacity, renunciation (and bankruptcy for property and affairs LPAs)), then the other attorney/s can deal with matters.

There is also a “hybrid” box regarding acting jointly in some aspects and jointly and severally in some aspects and the box is there to detail out what things should be treated in which way. This could be jointly for the sale of property and/or for transactions over a certain limit, such as £10,000. Problems can therefore arise when this should have been the option chosen and not jointly or jointly and severally.

So the first 6 issues relate to these kinds of things:
1. Joint and several attorneys are told to act jointly – they should have used the hybrid box
2. Clause for a majority or quorum to act
3. Clause that allows the survivor of a joint appointment to continue to act
4. Where the donor’s spouse should be appointed as sole attorney and their children as replacement attorney/s
5. Where the donor fails to specify the joint and several functions in a hybrid appointment
6. Where the donor state that the decision of one attorney is to prevail

Some of these can be OK, but they have to be expressed in the right box and in the right way and if they are not drafted correctly in the correct place, then they will be severed.

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