Mental Capacity Myths

A Lasting Power of Attorney (LPA) is a legal deed appointing one or more individuals (“attorneys”) to make decisions on your behalf. 

In this article, we unpack some of the common reasons given by clients for not making LPAs, often based on false assumptions:

• “My spouse or civil partner can make decisions for me if I lose mental capacity” You may think that if you lose capacity, your spouse or civil partner would be able to deal with your property and financial affairs, or make decisions in relation to your health and care, however, they have no automatic right to do so. Despite the common use of the term “next of kin”, this is not a legal status and does not confer any decision-making powers on your relatives. In order for someone to make decisions on your behalf, in the event that you lack the mental capacity to do so yourself, they would need to be appointed under an LPA.
• “I’ve already made an Enduring Power of Attorney” The LPA replaced the Enduring Power of Attorney (EPA) in 2007. Whilst EPAs still remain legally valid, it can cause the following difficulties in practice:
  • EPAs only cover your property and financial affairs but do not cover your health and care decisions which require a separate health and welfare LPA;
  • The EPA is registered when you start to loose, or have already lost, mental capacity meaning that it cannot be used by your attorney(s) straightway. This can create issues if decisions need to be made urgently. An LPA, however, can be registered as soon as it has been completed and is therefore ready to use when required; and
  • Unregistered EPAs can be used by attorneys while the donor still has mental capacity, but more and more financial institutions are not accepting them, as they are not registered, even though this is not a requirement.  LPAs can only be used when they have been registered.
• “I’ve already appointed executors under my Will to make decisions for me” An executor appointed under your Will deals with your financial affairs only after your death, whilst an attorney appointed under an LPA makes decisions on your behalf during your lifetime.  The LPA comes to an end on the day you die, and the Will then takes effect.
• “I’m too young to consider making an LPA” LPAs are not just for later life, as some people may think. If, for example, you were involved in a serious accident which left you incapacitated, those who you would wish to make decisions on your behalf would not have the ability to do so, if no LPA was in place. Also, without an LPA, those in charge of your care (e.g. social workers and doctors) would make health and care decisions based on what they believe to be in your best interests. 
• “I have capacity at the moment so I will think about it when the time comes” To make an LPA, you must have mental capacity. Thinking about making an LPA once you have lost mental capacity is too late and, in these circumstances, an application to the Court of Protection would need to be made to appoint a Deputy to make decisions on your behalf which can incur significant costs and delay. LPAs really are a stitch in time. There is no expedited registration service and the current time scale for registration of LPAs by the Office of the Public Guardian is 20 weeks, and the LPAs cannot be operated until they are registered.

Making an LPA brings peace of mind, knowing those you chose are appointed to act on your behalf, should you become unable to make decisions during your lifetime.

Sarah Grimwood is an Associate in the Private Client Team in Putney. Sarah advises on a range of private client matters including tax advice; trust advice and administration; and wills, estate planning and estate administration.