Workshop: Private client: LPAs

The Ministry of Justice's consultation on the current lasting power of attorney (LPA) regime, which closes on 19 October 2012, highlights areas of difficulty encountered with registering LPAs and their proposals to move into the digital era.

As is very well known, on 1 October 2007 the Mental Capacity Act 2005 came into force. It repealed the Enduring Powers of Attorney Act 1985 to do away with Enduring Powers of Attorney (EPA) and introduce the all singing, all dancing Lasting Powers of Attorney.

The change came about as a response to the alarming level of abuse of EPAs. Senior Judge Denzil Lush estimated that financial abuse occurred in ten to 15 per cent of registered EPAs and even higher levels of abuse of unregistered EPAs.

LPAs were introduced with a mandatory registration requirement to prevent this abuse. It is because of the strict requirements of this safeguard that it is so easy to go wrong when drafting and registering LPAs. One of the duties of the Office of the Public Guardian is to ensure that LPAs that are not made in accordance with the Mental Capacity Act are not registered.

The Office of Public Guardian (OPG) has no power to allow amendments to incorrectly executed documents. Once each part of the LPA has been signed it is too late to go back and make an amendment. The OPG cannot accept a statement or affidavit correcting the mistake because of its aforementioned duty.

How to avoid a rejection

I expect most private client lawyers will have their own checklist. A lot of the ?steps are obvious but it is worth looking ?at them systematically to prevent ?avoidable mistakes.

1. Check dates carefully

LPAs must be signed by the donor of the power, a certificate provider, the attorneys and replacement attorneys and everyone must sign in a strict order:

? The donor;

? The certificate provider;

? The attorneys.

?Check the dates carefully. Has an attorney signed before the donor? Has everyone written the date they signed?

The OPG will only permit registration? if the period between the donor signing and the final signature does not exceed ?one year.

2. Have the witnesses all given their names and addresses?

Who has witnessed the signatures? Attorneys are not permitted to witness each other or the donor's signatures.

While it will not render an LPA invalid, it is good practice to avoid the spouse of an attorney or the donor being a witness.

Have the dates been written clearly and correctly? The OPG have been known to reject applications where roman numerals have been used to express the date.

3. Certificate providers

Make sure the certificate provider is not a family member of the donor. The legislation is not entirely clear. A first cousin has been held to be a valid certificate provider but in-laws may not be.

Does the certificate provider have the appropriate professional skills?

Play it safe have an independent solicitor or doctor act as the certificate provider

4. Named persons

An attorney cannot be validly appointed as a named person. However, if the donor has appointed other named persons as well as an attorney the LPA will still be valid.

5. Restrictions and conditions ?and powers

An LPA can be rendered invalid by attempting to place invalid restrictions on the attorneys to by trying to give them inappropriate powers. Avoid the following types of clauses which are invalid:

? Wide power of delegation.

? Power to make tax planning gifts.

? Requirement to obtain consent from third parties (a duty to consult is permitted).

? Euthanasia clauses.

? Permitting replacement attorneys to act in circumstances other than death, bankruptcy or mental incapacity of or renunciation by a primary attorney.

? Appointing a replacement attorney for ?a replacement attorney.

? Above all complete the form properly.

? Failing to select an option about life sustaining treatment renders the ?LPA invalid.

? Failure to include the donor or attorney's date of birth.

? Failing to sign continuation sheets.

? Using the wrong continuation ?sheets, check the heading each ?page (does it relate to the correct ?type of LPA?)

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