If you are thinking about making a Lasting Power of Attorney (LPoA), you will need to know how to do this and how much it will cost. The following guide examines the application process and the fees associated with creating an LPoA.
Lasting Power of Attorney cost: What is an LPoA?
A Lasting Power of Attorney is a legal document that allows you to appoint another person to make decisions on your behalf. Legally speaking, the person creating an LPoA is known as the ‘donor’, and the person appointed to act on their behalf is known as an ‘attorney’.
You may need an attorney to act on your behalf because you need help temporarily, for example, during a stay in hospital or a prolonged trip abroad. An LPoA can also be put in place for the future, in the event that you ever lose the mental capacity to make your own decisions.
There are two different types of Lasting Power of Attorney, one for decisions about your property and financial affairs, and one for decisions relating to your health and care.
A financial LPoA can be put in place to take effect as soon as it is registered, whereas a health and care LPoA can only be used in the event that you no longer have the mental capacity to make your own decisions.
Many donors elect to create both types of Lasting Power of Attorney, often with different attorneys to make different types of decisions.
You can appoint more than one attorney for each type of LPoA. Further, where you appoint more than one attorney, you can elect that they act jointly, where all decisions must be made unanimously. Alternatively, you can elect that they act jointly and severally, where important decisions must be made together and other day-to-day decisions can be made independently.
How much does a Lasting Power of Attorney cost?
It is free to complete your Lasting Power of Attorney online, however you will need to register your LPoA with the Office of the Public Guardian (OPG) before it can be used. The registration fee is £82 per form.
This fee applies to both types of Lasting Power of Attorney, so if you have both a financial, and a health and care LPoA, the total cost for fees will be £164.
You can pay your application fee by card online or send a cheque with your paper forms to the OPG. This fee includes the cost of processing your application.
For those of you who are on a low income, you may be eligible to a 50% reduction. In some cases, for example, where you are on certain means-tested benefits, the fee may be waived altogether. You will need to provide proof of income and/or benefits to be entitled to these concessions.
You will be required to complete an additional online form to qualify for the fee reduction or exemption, namely Form LPA120, the ‘fee remissions and exemption form’. When you use a paper form and post the LPoA, you will need to include Form LPA120, as well as proof of your low income or benefits.
To receive a fee reduction you must be in receipt of a gross annual income of less than £12,000. Gross annual income refers to the money that you receive before tax, although it is not limited to just your salary or wages. It can also include:
- Non means-tested benefits, for example, Attendance Allowance and Disability Living Allowance
- interest from investments
- rental income from property.
If you are in receipt of any of the following means-tested benefits, you will not be required to pay the LPoA fee(s):
- Income Support
- Income-based Employment and Support Allowance
- Income-based Jobseeker’s Allowance
- Guarantee Credit element of State Pension Credit
- Working Tax Credit and at least one of:
- Child Tax Credit
- Disability Element of Working Tax Credit
- Severe Disability Element of Working Tax Credit
- Housing Benefit
- Council Tax Support or Council Tax Reduction (not the 25% single person reduction or the Class U exemption)
- Local Housing Allowance.
If you are in receipt of Universal Credit, you may be able to pay a reduced fee. This area is a little grey because Universal Credit is still in its trial phase. As such, the OPG will need to consider the fee reduction application before they can say how much the donor will have to pay.
Please note that it’s only your own benefits and income that are taken into account, not those of your attorney(s), even where an attorney is applying to register an LPoA on your behalf.
If your affairs are complicated, or you want the peace of mind that the LPoA has been properly created and registered, seeking legal advice will help you with the process as a whole.
If you lose mental capacity and you do not have a Lasting Power of Attorney in place, your friends or relatives will need to apply to the Court of Protection for a Deputyship Order to be able to make decisions for you.
The procedure for obtaining this type of order can be complicated and extremely costly. As such, obtaining an LPoA is a far quicker and cheaper option, and gives you the flexibility of electing exactly whom you want to act on your behalf.
What is the application process?
To create a Lasting Power of Attorney you must use the prescribed forms: LP1F for financial matters and LP1H for health and care matters.
You will need to provide the details of the attorney(s) that you choose to appoint. An attorney does not need to be legally qualified or specially trained, however, they must be aged 18 or over and have the mental capacity to make decisions for you.
You should think carefully about whom you appoint as an attorney. It should be someone that you know well and trust to act in your best interests at all times.
You will also be required to name any other people that you would like to be notified about the creation of an LPoA. This is a safeguard so that any objections can be raised about, for example, the appointment of a particular attorney or if it is thought that you may have been pressured into signing.
The application form will need to be signed by yourself, your attorneys and what’s known as a certificate provider. A certificate provider is an independent person required to verify that the donor understands what s/he is signing and that they have not acted under any pressure.
The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law and should not be treated as such.
Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission.
Before acting on any of the information contained herein, expert legal advice should be sought.