A lasting power of attorney (LPA) gives a person or persons (known as attorney(s)) the authority to act for another person (known as the donor) if the donor is unable to do so. That authority continues even if the donor loses the mental capacity to make decisions.

An LPA for financial decisions gives authority to the attorney(s) in relation to the donor’s property and financial affairs. It is also possible for a donor to have a different type of LPA for health and welfare decisions.

In this note there is guidance on:

• How you can be appointed as an attorney to make financial decisions for the donor.
• Your role, duties and responsibilities.
• What you are and are not allowed to do as an attorney.
• The registration of LPAs.
• When your role as attorney will end.

Appointment as attorney

Qualifications

An attorney can be anyone that the donor trusts to act in this capacity. You do not need any special qualifications but you must be:

• Over the age of 18.
• Financially solvent (not bankrupt or subject to a debt relief order).

You can refuse to be appointed as an attorney if you wish (in which case you should not sign the LPA form). If you do decide to accept an appointment, it is important that you feel capable of managing the donor’s affairs for an indefinite period if the donor is unable to do so themselves. Depending on how complicated the donor’s financial affairs are, this could take a substantial amount of time.

How is an attorney appointed?

The LPA must be made using a specific form (called an LP1F form). The form must be signed by:

• The donor, in front of a witness.
• A person who is able to certify that the donor understands what is being signed (the certificate provider).
• The attorney(s), in front of a witness.

The LPA form is completed by the donor (or by a professional on the donor’s behalf) and includes your personal details. Once the form is completed, it must be signed in the right order. The donor must sign first, then the certificate provider and then you and any other attorneys.

When signing the LPA, you are confirming that you have read the LPA, including section 8 of the form (your legal rights and responsibilities), and that you understand your duties and role. You also acknowledge that the LPA must be registered before you can use it.

Joint appointments

It is possible for a donor to appoint more than one person to act as an attorney. Replacement attorneys can also be appointed.

Multiple attorneys can be appointed in the following ways:

• If attorneys are appointed to make decisions jointly, they can only act together. This may prove inconvenient, particularly for day-to-day decisions. The LPA terminates if one of the attorneys can no longer act (or dies) unless a replacement is named in the LPA.
• Jointly and severally. If attorneys are appointed to make decisions jointly and severally, they may act either together or independently. This provides more flexibility than appointing attorneys to act jointly and means that the remaining attorney(s) can continue to act even if one becomes incapable of doing so (or dies). The downside of this flexibility is that one attorney may act in a way that the other attorney(s) would not endorse.
• Jointly when making some decisions and jointly and severally when making other decisions. This option can provide a compromise between allowing sufficient flexibility for attorneys to act independently for day-to-day matters and jointly in relation to more important decisions. The donor specifies which decisions the attorneys must take jointly.

When discussing your appointment with the donor, you must ensure that you feel comfortable working with any other people who will also act as attorneys.

What can I do as an attorney?

What are my duties as an attorney?

If the donor loses mental capacity, you will need to manage the donor’s property and affairs and make any decisions that the donor is unable to make. For example, this might include:

• Paying bills.
• Operating bank accounts.
• Making investment decisions.
• Selling property.

The donor may specify in the LPA that you can act as attorney even while the donor still has the capacity to make financial decisions. This does not mean that you can make all financial decisions for the donor, it just means that you can act on behalf of the donor if the donor allows you to do so at the time. This can be helpful if the donor is unwell (for example, the donor is physically unable of getting to the bank) or on holiday for an extended period of time.

Will I be paid?

You can recover all of your reasonable out-of-pocket expenses from the donor. Out-of-pocket expenses include, for example, the cost of telephone calls to the donor, travel to the donor’s bank and postage to pay the donor’s household expenses.

You can only receive fees for acting as an attorney if the donor has expressly authorised payment in the instructions section (section 7) of the LPA form. If you do not want to take on the role of attorney without payment, you should discuss this with the donor and check the LPA form carefully before signing.

What are the limits on what I can and cannot do?

• Restrictions imposed by law under the Mental Capacity Act 2005. The Mental Capacity Act 2005 (MCA 2005) covers LPAs and what you can do as an attorney. The MCA 2005 contains the following five important principles that you must observe:
• a person must be assumed to have capacity unless it is established that they lack capacity. This means that you must assume that the donor has capacity to make financial decisions and consider each decision as the donor makes it, giving support to the donor to make the decision , if able to do so;
• a person is not to be treated as unable to make a decision unless all practicable steps to help the donor to do so are taken without success. Some people need help to make or communicate a decision. For example, you may need to help the donor with non-verbal communication (for example, writing down a decision or communicating by sign language) or provide relevant information in a more accessible format. The donor may have fluctuating capacity so there might, for example, be a particular time of day when it is best to try to help the donor to reach a decision;
• a person is not to be treated as unable to make a decision merely because the donor makes an unwise decision. It is important to recognise that the donor is an individual who may have different beliefs, values and attitudes to you. This means that the donor may make a decision that you consider unwise, even though the donor does have capacity to make that decision;
• an act done, or decision made, under the MCA 2005 for or on behalf of a person who lacks capacity must be done or made in the donor’s best interests. This is of fundamental importance and should underpin everything that you do on behalf of the donor; and
• before the act is done, or the decision made, consider whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person’s rights and freedom of action. You should always consider whether any act on behalf of the donor could be done in a less restrictive way.

MCA 2005 is supplemented by the Mental Capacity Act Code of Practice. You are legally obliged to consider the Code of Practice, which contains helpful guidance for attorneys and explains how the principles should be applied in practical scenarios. You may find it useful to read Chapter 7 of the Code of Practice before taking up your appointment (see www.gov.uk/government/publications/mental-capacity-act-code-of-practice).

Record keeping. You must keep accounts, receipts and records of financial transactions made on behalf of the donor. The Office of the Public Guardian (OPG) may ask you to produce these at any time. You should also keep your own finances completely separate from those of the donor.

Gifts. There are strict limits on the kinds of gift that you can make on the donor’s behalf. For example, you can give birthday, Christmas and wedding presents provided that the gifts are reasonable, with regard to the donor’s financial resources. You cannot make gifts for inheritance tax planning or pay school fees for the donor’s grandchildren without making an application to court. If you are in any doubt about whether you can make a gift using the donor’s funds, seek professional advice or guidance from the OPG.

Other restrictions imposed by law. If you are an unpaid attorney, you must apply the same care and skill that you would use to make decisions about your own life. Attorneys who are paid for their services, or claim to have particular skills or qualifications, must show a higher degree of care and skill.

You must also ensure that you:

• do not place yourself in a position where your own personal interests conflict with those of the donor or where there is a real possibility that this will happen;
• do not receive any unauthorised profit from your position as attorney;
• keep the affairs of the donor confidential;
• do not delegate your authority as attorney to anyone else, although you may take professional advice (for example, from an investment manager if the donor has given express authority in the instructions box in section 7 of the LPA); and
• act with honesty.

Donor’s instructions. The donor can place additional restrictions on your authority in the LPA. These are called instructions and you should check any wording that is included in the instructions box in section 7 of the LPA carefully before you sign it. Common instructions in an LPA for financial decisions include:

• requiring you to submit annual accounts to a person of the donor’s choice; and
• allowing you to appoint an investment manager to make decisions about the donor’s investments.

Donor’s preferences. The donor can provide advice in the LPA about how the donor would like you to manage their affairs. Unlike an instruction, this indicates the donor’s preference, rather than something that you must do. For example, it might say that the donor would prefer you not to invest in tobacco companies or that the donor would like to keep their current account at a specific bank.

Can I deal with the donor’s business interests?

Generally speaking, an attorney under an LPA can deal with the donor’s business interests. However, you should check whether there is anything in the instructions section (section 7) of the LPA that states that you do not have authority to do this. A director of a company cannot delegate their powers and responsibilities to an attorney unless the articles of association of the company specifically allow it.

Who checks that I am acting properly?

Anyone who suspects that an attorney is not performing their duties properly, or is exploiting or abusing the donor, can contact the OPG. The OPG then looks into the complaint and may direct one of the team of visitors to visit an attorney and investigate. In more serious cases, the OPG refers the matter to the Court of Protection.

If you have concerns about a co-attorney, you should raise them with the co-attorney first and then, if it cannot be resolved, with the OPG.

Am I protected if things go wrong?

If you act in accordance with your legal duties and, in particular, in the best interests of the donor, then it is unlikely that you will be criticised for any decisions that you made on behalf of the donor.

If you act under a registered LPA that turns out to be invalid, you will not incur any liability (to the donor or anyone else) unless:

• You knew that the LPA was invalid.
• You were aware of circumstances that would have terminated your authority to act under the LPA, if it was valid.

If you have acted improperly:

• You may need to pay the donor money to compensate for the donor’s loss.
• In the case of ill-treatment or wilful neglect of the donor, an attorney can be found guilty of a criminal offence punishable by a fine or imprisonment of up to five years.
• You could be charged with fraud.

Registration

You or the donor can register the LPA with the OPG at any time. However, attorney(s) can only use the LPA to make decisions on behalf of the donor after it is registered.

To register the LPA, the donor or attorney(s) must sign the registration part of the LPA form (at the end) and give notice using an LP3 form to anyone that the donor has specified as “people to be told”. If you are applying for registration and are appointed as a joint attorney, all of the attorneys must add their details and sign the registration part of the form. If you are appointed as joint and several attorneys, only one attorney need add their details and sign the registration part of the form.

The OPG charge a registration fee of £82, which is payable from the donor’s funds. In cases of financial hardship, a lower fee may be charged or the fee waived.

How the LPA is used after registration

When you start using the LPA, you may need to provide evidence of your authority to:

• Utility companies.
• The local authority.
• Care homes.
• Other third parties.

The requirements of each individual or organisation vary, for example, some may need to see the original registered LPA while others may only want a photocopy.

You should avoid sending the original registered LPA by post to a third party. Offer to supply an office or certified copy instead. You can get office copies from the OPG at a cost of £35 per document. Alternatively, a solicitor or accountant can certify a copy of the LPA.

How does my appointment end?

Death of donor or attorney

When the donor dies, the LPA automatically comes to an end. Send the original LPA and the death certificate to the OPG as soon as possible.

If you are appointed as a joint attorney and one of the other attorneys dies, your appointment will end unless a replacement is appointed.

Giving up your appointment

You can decide to stop acting as an attorney at any time. If the LPA is registered, you must complete form LPA005 and send the original to the donor. You must also send a copy to the OPG and to any other attorneys named in the LPA. If you are the only attorney, you should send a copy to any replacement attorneys named in the LPA.

Further Help

For further details or to book an initial consulatation call or email Emma Crompton on 01708 757575 or Emma.Crompton@ker.co.uk or David Gregory on 01708 757575 or David.Gregory@ker.co.uk .

Kenneth Elliott + Rowe Enterprise House 18 Eastern Road Romford Essex RM1 3PJ