LPA’s can be extremely important in a situation where someone has lost mental capacity. For example, where a person has lost mental capacity, only someone with legal authority under an LPA or a court order will be able to make legally binding decisions, such as operating bank accounts, on their behalf.
Also, where a health and welfare LPA has been put in place, this can allow an attorney to make decisions in regard to a person’s medical treatment when they have lost mental capacity.
Is it worth it? The only way to answer that question is to consider what would happen if a person has not put an LPA in place. There are broadly two scenarios to consider.
- The person never loses mental capacity
- The person does lose mental capacity at some stage
In these circumstances, it is unlikely that an LPA would have been required. The benefit of an LPA in these circumstances would only have been to give peace of mind so that the person would know that their attorney could manage their affairs if they ever did lose capacity.
Clearly, the difficulty is that, even though many people never lose mental capacity, a significant number of people will do so at some stage. Unfortunately, none of us can know in advance whether this will be relevant to us.
The scenario about which people are generally concerned is where they have lost mental capacity and they do not have a Lasting Power of Attorney in place. In this case, it will not generally be possible for them, or anyone proposing to act on their behalf, to access their bank accounts or enter into legal agreements such as to buy or sell property or obtain services.
Although joint bank accounts may in practice allow the other named account holder to pay bills from that account, according to guidance issued by the British Bankers’ Association, once one account joint account holder has lost mental capacity, the other will not have an automatic right to access the account without an LPA (or an Enduring Power of Attorney or court order).
If there is no LPA in place, it will usually be necessary for someone to apply to the Court of Protection to be appointed as a ‘deputy’ to make decisions on behalf of the person who has lost capacity.
We are now seeing an increasing number of applications to the Court of Protection to appoint deputies and, although this is an invaluable service of last resort, there are significant downsides in terms of time and cost.
Deputies have similar powers to an attorney acting under an LPA but are generally subject to a greater level of supervision from the outset. Unfortunately, it can often take six months or more to obtain a court order appointing a deputy. This delay is usually magnified by the pressing need of the family to be able to pay bills and make arrangements on behalf of the person who has lost capacity.
The cost of an application for deputyship is also an issue. The cost for a firm of solicitors to obtain a court order for deputyship is likely to be at least double that of putting in place an LPA.
In regard to health and welfare decisions, it is also worth noting that, once a person has lost mental capacity, they will not be able to make decisions in relation to their medical treatment or care. If no health and welfare LPA is in place, then the medical staff will make all decisions regarding care (though it is likely that they will consult the family and would comply with written instructions which have been lodged by the person in the correct form to constitute a ‘living Will’).
In conclusion, we would say that there are strong reasons for putting in place an LPA. In our experience, family members who have seen first-hand the difficulties of a deputyship application have tended to vote with their feet and swiftly put in place LPAs for themselves.
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