Powers of Attorney and Bankruptcy

Question 1

General Power of Attorney:

Answer 1

• Created under the PoA Act 1971
• Temporary measure, i.e. should donor go abroad temporarily
• Only valid as long as donor has mental capacity
• S.10 gives attorney power to do anything donor can do
  
  • except in donor’s capacity as trustee/ legal personal representative
• Attorney must show original/ certified copy to prove authority
• Attorney can sign using own signature, plus ‘on behalf of’
• Can be revoked at any time by the donor
  
  • Auto revoked if donor loses capacity, dies of is adjudged bankrupt
  • If attorney does not receive notice of revocation, they are protected
  • If they carry out transaction after original expiry date or know it has been revoked, deemed as having had notice
• Attorney cannot give away donor’s property without consent in the power
  
  • Making large gifts is not compatible with a PoA

Question 2

Lasting Power of Attorney:

Answer 2

• Replaced EPA on 1 October 2007
  
  • No new EPA can be created
  • Existing EPA still valid
• Created under MCA 2005
• LPA gives power to act on donor’s behalf, in the event that the donor loses capacity or no longer wishes to act for themselves.
• Two types of LPA
  
  • Financial & Property
  • Health & Care
• LPA doesn’t become effective until it is registered with the OPG
• Usually this is done straight away
• Can apply online using simplified forms
• Donor must have mental capacity when they make the LPA

Question 3

Process of applying for an LPA:

Answer 3

• Complete prescribed form
  
  • Signed by:
    
    • donor
    • attorney
    • certificate provider
      
      • confirms donor understands, effect of creating LPA and are doing so of own free will/ no fraud
  • Witnessed by independent person
  • Process takes 4-10 weeks
  • Can be done any time after LPA is created, even if donor still has mental capacity
  • 3 week period in which LPA can be objected to

Question 4

Validity requirements for an LPA:

Answer 4

• Donor and attorney over 18, not bankrupt
• Donor has mental capacity
• LPA made on prescribed form
• LPA state donor and attorney read prescribed info and attorney understands duties
• Certificate from prescribed person
• LPA can be revoked by donor, if they have mental capacity
• Also revoked on bankruptcy of attorney or donor (not health and welfare), if the donor/ attorney are married and they divorce, the attorney is incapacitated

Question 5

What are the responsibilities of the attorney?

Answer 5

• Make decisions (only those authorised by the LPA) in donor’s best interest.
• Conslt with donor and others with an interest in donor’s affairs before making decisions.
• Keep own money separate from donor’s.
• Respect donor’s confidentiality.
• Ensure no conflict of interest.
• Only make gifts on customary occassions/ gifts that would be expected.
• If attorney breaches duties, can be ordered to make restitution
• Fine and/ or 5 years in prison if mistreat/ purposefully neglect someone who lacks capacity.

Question 6

What are the powers of the Court of Protection (COP)?

Answer 6

• Decide whether someone has mental capacity
• Make decisions/ act for someone who does not
• Appoint deputies where lack capacity and no LPA/EPA in place
• Determine whether EPA/LPA are valid
• Remove deputies / attorneys who fail to do their duty
• Hear objections to LPA/EPA registrations
• Must apply MCA principles and ensure they are in best interest of those who lack capacity

Question 7

Who can be appointed deputy by the COP?

Answer 7

• Close friend/ family member
• Could be a professional
• Over 18
• COP will issue court order confirming deputy
• Deputy must apply to be appointed by COP
  
  • Property and financial affairs
  • Personal welfare