LPA issues – Part 3

1 Aug

Lasting Power of Attorney issues – Part 3

Following on from my earlier blogs these next set of the most common errors made by people when drafting the LPAs, which means that the provision they have included is severed, but these are specific to Property and Affairs LPAs.

When dealing with the financial affairs of someone else, the easiest way to think of what the attorney can do (on an unrestricted LPA), is everything the donor can do, except make significant gifts. The making of significant gifts is reserved to the Court and an application can be made to the Court of Protection, but the likely costs of this will be thousands of pounds, as the Court of Protection is very likely to appoint the Official Solicitor to act as Litigation Friend to the patient, so there are 2 sets of legal costs, £10,000 overall (or more) is not extraordinary!

If the donor of the power has children under the age of 18, there is an expectation that the donor is financially responsible for their children and therefore reasonable provision should be made, but it is probably safer to make an application to the Court of Protection for an order to cover financially supporting children until the end of their university education. The Court of Protection are likely to look favourably on an application to maintain a minor child.

The issue of mixing decision making powers between the two kinds of powers can be tricky, but they are very definitely separate, although if both kinds of powers are granted to the same attorney/s, then they have all the necessary decision making powers. It is therefore important to understand that a Property & Financial affairs LPA only does deal with financial issues and the Health & Welfare LPA has no financial authority at all.

1. Where the donor gives the attorney greater gift making power than that conferred by s12 of the Mental Capacity Act
2. Authorising the attorney to make provision for someone other than the donor
3. Cases where the donor should make 2 LPAs, one for the business and one for their private financial affairs.
4. Health and Welfare decision making powers for a Property and Financial Affairs attorney

All the above would be severed and as discussed, 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 it will cost another registration fee (currently £130).

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