Andrew O’Keeffe
- Partner
- Private Client
The missing piece of most estate plans: Lasting Powers of Attorney
Could your Lasting Power of Attorney withstand a challenge? As disputes concerning mental capacity continue to increase, proactive planning has never been more important to safeguard your wishes and minimise the potential for future disagreements.
A Lasting Power of Attorney (LPA) is a legal document that allows a person, known as the Donor, to appoint one or more trusted individuals, known as Attorneys, to make decisions on their behalf. These may concern property and finances, or health and welfare, depending on the LPA.
Mental capacity is central to the validity of an LPA. Under section 2 of the Mental Capacity Act 2005, a person lacks capacity in relation to a matter if, at the material time, they are unable to make a decision for themselves because of an impairment of, or disturbance in the functioning of, the mind or brain.
For that reason, it is important to put an LPA in place before there is any question about mental capacity. Leaving it until concerns have already arisen can create practical difficulties and may also increase the risk of the LPA being challenged at a later date, particularly where the point at which mental capacity became doubtful is unclear. LPAs can be prepared and registered long before they are needed.
Addressing possible challenges
Challenges to an LPA may arise for a number of reasons. These can include allegations that the Donor lacked mental capacity when the document was signed, or that they were placed under undue influence by a family member or carer.
Where there is any possible doubt about mental capacity at the time an LPA is made, it is sensible to obtain a mental capacity assessment from a suitably qualified medical practitioner. This can provide an important additional layer of protection, helping to reduce the scope for later allegations and potentially costly disputes. It may also assist Attorneys if their decisions are subsequently scrutinised.
A mental capacity assessment may be particularly important where the Donor is elderly, where there are complex family dynamics, or where there is an existing diagnosis of dementia or Alzheimer’s disease. Such a diagnosis does not automatically mean that a person lacks mental capacity, but it can make questions about mental capacity more likely to arise.
There can also be wider consequences. If an LPA and a Will are executed at around the same time, and the LPA is later disputed on the basis of mental capacity, questions may also be raised about whether the person had testamentary capacity when making their Will. Taking advice early, and putting appropriate evidence in place, can therefore help protect not only lifetime decision-making arrangements, but also the wider estate plan.
Losing mental capacity with no LPA
Planning for a possible loss of mental capacity is not solely an issue for later life. Serious illness or injury can affect anyone, at any age. LPAs should be a central part of everyone’s lifetime planning, helping individuals retain control over who will make decisions on their behalf and avoiding the need for costly and time-consuming Court of Protection applications. If there is no valid LPA in place when an individual loses mental capacity, a relative or other appropriate representative would need to apply to that Court for the appointment of a Deputy. The individual themselves would have no control over who that person would be.
An LPA is often described as the most important document people never get around to signing. Putting one in place can provide reassurance for you and your family, while helping to avoid uncertainty, delay and potential disputes in the future.
This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.
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