Making an LPA Yourself, Common Mistakes and Pitfalls
15 June 2016
Making a Lasting Power of Attorney (LPA) is key part of planning for the future and making sure that you've protected yourself if you ever become unable to make decisions for yourself.
Like writing a Will, you can write a Lasting Power of Attorney yourself. You can draft the documentation and make the application to the Office of the Public Guardian and pay their fee to have it registered. Or, you can use a professional LPA writing service or a Solicitor to prepare everything for you. Obviously the Solicitor costs for writing a Lasting Power of Attorney will usually be the most expensive.
At Co-op Legal Services a Lasting Power of Attorney costs from £225 + VAT (£270 including VAT). Mirror Lasting Powers of Attorneys for two people start from £375 + VAT (£450 including VAT).
The main reason for using a professional LPA writing service is so you have peace of mind. You can also make sure that you clearly understand your options and lastly, that everything is prepared correctly, with no mistakes.
Unfortunately, if you get this wrong, then the Office of the Public Guardian could refuse to approve it. And, if there are provisions in your LPA that are invalid, then the LPA will be referred to the Court of Protection to 'sever' the invalid provisions.
Every month, over a hundred LPAs have severed arrangements because they are not valid. Between 2012 and 2015 the Office of the Public Guardian received over just over a million LPA applications and out of those, 130,000 were considered imperfect for registration. This equates to more than 1 in 10, so you can see how often mistakes are made.
Most Common LPA Errors
Apart from clerical and administrative errors, the Office of the Public Guardian say that the most common errors are where an LPA includes provisions that are not compatible with the way the Attorneys have been appointed. This is not surprising. Understanding the options when making your LPA can be quite confusing without the right advice.
If you want to appoint two or more people to be your Attorneys then you can choose whether they act 'jointly' or 'jointly and severally'.
Appointing them 'jointly' means they both have to agree before any decision or action can be taken on your behalf. But appointing them 'jointly and severally' means that your Attorneys can act independently of each other without needing the other to agree. To make things even more complicated, it's possible to appoint them to act 'jointly' in some decisions but 'jointly and severally' in others.
You can also appoint replacement Attorneys in case your original Attorneys are unable to act. The variety of options available can lead to people getting confused about how to make sure their LPA actually reflects what they want but still remains legally valid.
Attorneys Acting Jointly and Severally
If you want to appoint your Attorneys' to act independently of each other then it can cause issues if you go on and try restrict this freedom with other conditions in your LPA. Some examples of invalid provisions in LPAs given by the Court include:
- Stating that Attorneys must agree before any investment is made over £2,000
- Including a provision that one Attorney can only act once the other Attorney cannot act anymore
- Adding a provision that one Attorney can only act for your personal affairs and another can only act for your business affairs.
All these kinds of stipulations in your LPA will result in the severance of this part of your LPA.
Attorneys Acting Jointly
You may decide in your LPA that you want all of your Attorneys to act jointly. But it's important to know that if one of them dies, the surviving Attorney can no longer act alone. This is because you've said you only want them to make decisions together. Any attempt to add in conditions or clauses to avoid this will mean the provision is declared invalid.
At the risk of stating the obvious, if you want your Attorneys to act jointly, you can't get around the fact that all of your named Attorneys must act jointly! Examples of provisions that have been declared invalid include:
- Stating that two out of the three Attorneys must agree before a decision can be taken
- A provision that one Attorney can still act if the other dies
These types of restrictions contradict appointing Attorneys to act jointly, so they are invalid.
Attorneys Making Gifts
Your Attorneys are generally allowed to make gifts on 'customary occasions' such as birthdays, weddings, anniversaries, Christmas and other religious festivals.
But any provisions made in your LPA to ask your Attorney to make gifts outside of those authorised by law will be invalid. This could include provisions like allowing your Attorney to:
- Make gifts to reduce the impact of Inheritance Tax (IHT) on your estate
- Continue making any regular gifts being made by you when you made the LPA
- Set up a Trust fund for your grandchildren
- Pay the grandchildren's school fees
- Make interest free loans
- Give family members money when they need it
A Lasting Power of Attorney does not allow for maintenance of family members unless the person making the LPA has a legal obligation to look after them. This would include a husband, wife or civil partner and any children under the age of 18.
Your replacement Attorney can only start to act once your original Attorney's appointment has ended. This happens due to a 'trigger event'. These trigger points are:
- If they die
- If they refuse to act, known as disclaiming
- If they are bankrupt
- If they lose mental capacity
- If you are married or in a civil partnership with your Attorney and you divorce or dissolve your civil partnership.
If your LPA gives any other reasons for your replacement Attorney to act, this provision will not be allowed.
These are some of the most common mistakes that people make when making their own LPAs.
At Co-op Legal Services we offer a professional Lasting Power of Attorney writing service and have a specialist team to discuss your circumstances and help you understand your options. We can take your instructions and prepare your LPA for you to ensure that you avoid any of these pitfalls.
We will offer you the help and advice you need to make sure your LPA works for you and for your family. At Co-op Legal Services, a Lasting Power of Attorney costs from £225 + VAT (£270 including VAT). Once we have provided you with a written quote for the agreed work, that price will not change.
Please note that the fee to register an LPA with the Office of the Public Guardian (OPG) is in addition to our fee for writing an LPA.
For your peace of mind, we can take full responsibility for the registration of your Lasting Power of Attorney with the Office of the Public Guardian, which will require payment of both our fixed fee and the OPG registration fee which is currently £82 per LPA.