Lasting powers of attorney – it is easy to make a mistake
The Office of the Public Guardian have published a blog citing common mistakes in Lasting Powers of attorney (LPA’s):
- Using the wrong form i.e. using a health and welfare form instead of the property and finance form or an out of date form.
- Missing out pages, signing the form in the wrong order or not signing at all!
- Amendments using pencil or Tippex.
- Trying to include provisions that are not permitted, e.g. telling attorneys to make gifts that don’t comply with the Mental Capacity Act.
Further examples that can make the LPA unworkable (or invalid) are contradictions in the way that attorneys are appointed.
There are three ways that attorneys can be appointed, where there is more than one:
- Jointly and severally – which means that they can act together or individually;
- Jointly – which means that they can only act together; and
- Jointly for some decisions and jointly and severally for others. Those decisions must be set out in the LPA.
Option 1 is the most practical. Attorneys can make decisions together, but don’t have to, which may be beneficial for decisions which are urgent or straightforward. It would be for the attorneys to decide how they were going to exercise their duties.
While it seems to offer greater protection for the donor of an LPA, the disadvantages of appointing attorneys jointly, is that it can cause delay if an attorney is ill, abroad or disagrees with the other attorneys and also means that if one of them dies, or is unable to act for any reason, then all of them are prevented from acting under the LPA. The LPA will be unusable unless you have appointed replacement attorney(s).
Similarly, option 3 has the same disadvantages as option 2, in respect of decisions where attorneys must act jointly. Additionally, it can be difficult to decide now what future decisions should be made jointly or jointly and severally.
A common mistake is to appoint attorneys on one basis and then contradict this in the instruction box in the LPA, by requiring them to do something that is inconsistent with their appointment. Attorneys must follow instructions within the LPA. So if those instructions are not legally correct, they may have to be removed (with the donor’s approval) before the LPA can be registered, or if that’s not possible, you may need a new LPA.
Problem examples are:
- Appointing joint attorneys, but then instructing that they can make decisions by majority.
- Appointing joint and several or joint attorneys, but then instructing that only one of them can deal with e.g. business matters.
- Appointing three attorneys to act jointly and severally and then instructing that two must act at any one time, so that no one acts alone.
- Appointing A & B to act jointly and severally and then directing that B is only to act if A is incapable of acting.
- Appointing a husband and two of three children as attorneys and directing that if the husband could not act for any reason that any decisions needed to be approved by all three children, even though one of them was not an attorney.
Think carefully who is best placed to be your attorney and on what basis they should be appointed.