DIY Lasting Powers of Attorney: The Risks
Lasting Powers of Attorney (LPAs) are increasingly being recognised as a necessity when planning for our futures. However, they are not the simple ‘form-filling’ exercise that some may think and should always be executed with specialist legal advice.
What are LPAs?
LPAs are documents that allow you to appoint trusted individuals to make decisions on your behalf when you’re unable to. There are two types of LPAs:
- A Health and Welfare LPA, which can only be used in the event that you have lost mental capacity and are unable to make medical and welfare decisions for yourself
- A Property and Financial Affairs LPA, which is used when you’re unable to make decision for yourself, as above, but can also be used whilst you have mental capacity, if you have requested
Can I make Lasting Powers of Attorney without a solicitor?
The simple answer is yes. However, solicitors act as an important safeguard to ensure that the donor understand what LPAs are and that they have the mental capacity to make one. Solicitors also have to ensure that the donor is freely giving the power and has not been pressured into signing and that attorney must recognise their duties and risks of breaching them. The LPA must be structured in the most convenient way without any mistakes that could cause the document to become invalid.
Throughout the pandemic, we’ve seen an increase in the popularity of DIY legal documents. Although we are pleased to see an overall uplift in LPA writing, there are some quite serious issues associated with writing these using DIY LPA kits (either online or from the Post Office). The most common problems that arise are:
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Fraud/Lack of Capacity
The donor might not have the capacity to make this decision and the consequences may not have been fully explained. If the donor does not have sufficient mental capacity to authorise someone to act as their attorney, the LPA is not valid.
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Attorney Abuse of Power
Attorneys have a duty to act in the donor's best interests and use the money for the benefit of the donor solely. However, in some cases attorneys have abused their power by borrowing money from the donor or giving themselves early payments of their inheritance. This is not acceptable, and in fact illegal. In most cases, monetary gifts must be approved by the court.
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Common Mistakes
LPAs must be registered with the Office of the Public Guardian (OPG) before they can be used. If they are submitted containing mistakes, they will be rejected. As LPAs are usually utilised on loss of mental capacity, this can be problematic. If the OPG requires a new LPA to be completed and the donor has already lost capacity, the family will most likely have to apply for a deputyship order instead – which is a much more costly and lengthy process.
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Thinking of making an LPA?
Given the wide-ranging impacts of COVID-19, from shielding to unexpected illness, it is recommended that everyone over the age of 18, and in particular those that have substantial assets or business interests, should make LPAs. If you’d like to find out a little more about them, and perhaps start drafting one, you can speak with a local SFE lawyer today: click here to find one near you.