A Lasting Power of Attorney (LPA) is one of the most important documents a client can put in place during their lifetime. It allows a person (the donor) to appoint one or more attorneys to make decisions on their behalf if they lose capacity, or in the case of a Property and Financial Affairs LPA, sometimes while they still have capacity. LPA instructions and preferences can be included and this is often where issues arise.
An instruction is binding and must be followed. A preference is guidance only. Attorneys should take it into account, but are not legally bound by it. Most issues arise where instructions are unclear, overly restrictive, or attempt to go beyond what the law allows.
If instructions are unclear, unlawful or impractical, the Office of the Public Guardian (OPG) may raise queries on registration. In some cases, the wording may need to be removed by the Court of Protection before the LPA can be used. The following are some of the more common issues that arise when drafting LPA instructions and preferences.
Confusing LPA Instructions and Preferences
One of the most common drafting issues is using a binding instruction where a preference would be more appropriate.
For example:
“My attorneys must keep me living in my own home for the rest of my life.”
As an instruction it may cause problems. Circumstances can change. Care needs may increase, or the cost of remaining at home may become unsustainable.
Attorneys are under a duty to act in the donor’s best interests. A rigid instruction may prevent them from doing so.
In most cases, it is safer to set this out as a preference, for example:
“I would like to remain living in my own home for as long as it is safe and practical for me to do so.”
This gives guidance without removing flexibility.
Asking Attorneys to Act Outside Their Powers
An LPA cannot extend an attorney’s legal authority beyond what the law allows. If an instruction attempts to do so, it will either be ineffective or cause issues on registration.
For example:
“My attorneys must transfer my house to my children if I lose capacity.”
“My attorney must change my will to reflect my wishes.”
Attorneys cannot make substantial gifts outside their limited statutory authority, and they cannot amend or create a will. If a change to a will is required after loss of capacity, this must be addressed by an application to the Court of Protection.
Gifts Beyond an Attorney’s Authority
This issue frequently arises when considering wording on gifts within LPA instructions and preferences.
Under the Mental Capacity Act 2005, attorneys under a Property and Financial Affairs LPA have limited authority to make gifts. They may make gifts to charities the donor supported, or gifts on customary occasions, such as birthdays, weddings, anniversaries or religious festivals, to people connected with the donor.
The value of the gift must be reasonable in all the circumstances, particularly having regard to the size of the donor’s estate.
Larger gifts, property transfers, regular inheritance tax planning gifts, or gifts into trust will fall outside the attorney’s authority unless authorised by the Court of Protection.
Instructions which go beyond this will be ineffective without Court approval.
For example:
“My attorneys must give each of my children £20,000 per year to reduce inheritance tax.”
This will fall outside the attorney’s authority and may place them in breach of their duties if followed.
A safer approach is to record the pattern of gifting as a preference rather than requiring it:
“I have historically made gifts to my family on birthdays and at Christmas. I would like my attorneys to consider continuing gifts of a similar nature and value, provided these are reasonable.”
This reflects the donor’s wishes but recognises the limits on the attorney’s powers.
LPA Instructions and Preferences That Are Too Vague
Instructions must be capable of being followed. Vague wording often creates uncertainty rather than guidance.
For example:
“My attorneys must make sensible investments.”
This provides little practical guidance. What is “sensible” will depend on the donor’s circumstances, risk profile and future needs.
More useful wording would be:
“When making or reviewing investments, I would like my attorneys to consider my likely future needs, my attitude to risk, and whether professional advice should be taken.”
Requiring Professional Advice
It is often sensible to require attorneys to take professional advice. However, care is needed to avoid delegating decision-making.
For example:
“My attorneys must follow my financial adviser’s instructions.”
This risks transferring the decision to the adviser, which is not permitted. Attorneys can take advice, but remain responsible for the decision.
A more appropriate preference would be:
“I wish that my attorneys take appropriate professional advice and consider that advice when making decisions.”
Mixing Health and Welfare Wording into a Financial LPA
There are separate LPAs for Property and Financial Affairs and for Health and Welfare. Instructions should remain within the scope of the relevant LPA.
For example:
“My attorneys must decide which care home I live in”
A financial attorney may be able to pay care fees and manage property, but decisions about residence, care arrangements and day-to-day welfare belong primarily in a Health and Welfare LPA.
Mixing the two can lead to queries on registration.
Funeral Instructions and Organ Donation
An LPA ceases to have effect on the donor’s death. As a result, funeral wishes and organ donation wishes should not be included in an LPA.
Funeral wishes are better recorded in a will, letter of wishes or separate funeral planning document. Organ donation wishes should be recorded during lifetime, for example through the NHS Organ Donor Register, and discussed with family members where appropriate.
Conflicts with the Appointment of Attorneys
LPAs allow attorneys to be appointed to act jointly, jointly and severally, or jointly for some decisions and jointly and severally for others.
Problems arise where instructions contradict that structure. For example, the LPA may appoint two attorneys to act jointly and severally, meaning either can act alone. However, an instruction may then say:
“All decisions must be made by both attorneys together.”
This creates uncertainty because the instruction is inconsistent with the way the attorneys have been appointed. The OPG may query the wording, and third parties such as banks may be unsure whether one attorney can act alone.
LPA Instructions and Preferences That Depend on Subjective Judgments
Instructions should be capable of being applied objectively. Problems arise where the wording is subjective or uncertain.
Problematic wording might include:
“My attorneys may only act if my family thinks I am not coping.”
This creates uncertainty. Which family members? Must they all agree? What does “not coping” mean?
Safer wording would be:
“My attorneys shall only act under this power if they have obtained a written medical opinion stating that I am no longer mentally capable of managing and administering my property and financial affairs.”
LPA Instructions and Preferences That May Lead to Severance
If an instruction is invalid, ineffective or outside the scope of the LPA, the OPG may refer the matter to the Court of Protection. The court may direct that the wording be severed, meaning removed from the LPA, so the rest of the document can operate.
Severance can cause delay and uncertainty. It can also mean that wording important to the donor is removed entirely, where it could have been retained in a different form if drafted more carefully.
Overloading the LPA
A detailed LPA is not necessarily a better LPA. Excessive drafting can create ambiguity, inconsistency or inflexibility.
It is common to see LPAs with extensive instructions covering care, finances, family involvement and personal preferences.
While each clause may be reasonable on its own, in combination they can make the LPA difficult to operate and increase the likelihood of inconsistency.
In practice, it is often better to:
- use instructions only where necessary;
- use preferences to guide values and wishes; and
- record more detailed wishes in a separate letter of wishes which can be amended where necessary.
Conclusion
Careful drafting of LPA instructions and preferences is essential. The most common issues arise where instructions are overly restrictive, outside the attorney’s authority, or drafted in a way that creates uncertainty.
In many cases, a preference will achieve the intended outcome more effectively.
A well-drafted LPA should guide the attorneys while allowing them to act lawfully and in the donor’s best interests in circumstances that cannot be predicted at the time the document is created.
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This article is provided for general information only and does not constitute legal advice. Any wording or clauses referred to are illustrative and should not be relied upon as precedent without full consideration of the client’s circumstances, the will as a whole, and the law in force at the relevant time.
