By Rachel Main
A Lasting Power of Attorney (LPA) is a powerful legal document, enabling you (the Donor) to appoint an individual or individuals of your choosing (your Attorney(s)) to manage your financial affairs and/or to make decisions regarding your welfare, should you become unable to make such decisions yourself in the future. An LPA is, therefore, an important document and there can be serious implications for all involved.
Traditionally, Donors have consulted a legal professional, such as a solicitor, regarding their LPA and would have instructed that person to prepare the document.
However, these days there are now other options available, such as preparing a DIY LPA, which is either ‘off-the-shelf’ or available via an online service.
The most obvious perceived benefit of preparing a DIY LPA, rather than instructing a legal professional, is primarily a financial one. The prospect of saving money in legal fees is often attractive. However, the potential risks and ramifications in preparing a DIY LPA are significant.
Drafting the LPA document
An LPA will often span to some twenty pages or so. In preparing the LPA, thought must be given to the following areas:
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Choice and number of Attorneys – Do I need one Attorney or more? Do I need to appoint a Replacement Attorney? How would I like my Attorneys to make decisions? For example, would I like them to make all decisions together, or am I happy for them to make decisions together and independently of one another, or a combination of the two?
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Preferences and instructions – Do I have particular preferences and instructions as to how my Attorneys make decisions? Do I want to impose binding restrictions on them, or just offer guidance? How should I communicate these to my Attorneys clearly and succinctly?
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Mental and physical incapacity – For a financial LPA, am I happy for my Attorneys to make decisions if I lose mental or physical capacity, or do I wish to limit the LPA so my Attorneys shall only make decisions regarding my finances if I lose mental capacity? What are the risks and benefits of either option?
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Life sustaining treatment – For a medical LPA, would I like my Attorneys to have authority to give or refuse consent to life sustaining treatment?
A solicitor will guide you through these elements carefully and, ultimately, ensure the document is accurately drafted so as to properly reflect your wishes. If, however, you choose to prepare your own DIY LPA, and it is drafted incorrectly, the ramifications can be significant. Below are examples of some of the obvious potential consequences:
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Technical errors in the LPA could result in it being rejected by the Office of the Public Guardian (OPG), when the registration application is submitted, resulting in delays and possible additional costs in correcting.
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A badly drafted LPA could ultimately be rejected or misinterpreted by a financial or medical institution, thereby causing disruption to the management of your affairs and distress for your loved ones. Quite apart from that, a badly drafted LPA may not in fact adequately express your wishes at all.
Fraud and undue influence
A solicitor will discuss your proposed LPA with you in person, ensuring you understand the purpose of the document and are not acting under the influence of anybody else. Sadly, with the introduction of DIY LPAs, there is a very real risk of vulnerable people either being coerced into making an LPA they do not understand, or of somebody else simply making the application in the name of a vulnerable person who is totally unaware. Both scenarios could, quite easily, result in serious financial or other abuse further down the line.
Get it right the first time
At TWM, our expert Private Client team are here to help you and we offer an initial consultation with no obligation to proceed, so that we can discuss with you the things you should consider and help you think about your choices and options.
For further information, please contact rachel.main@twmsolicitors.com
For further details about our expertise in this area, please Click Here
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