What are Lasting Powers of Attorney and why do I need to make one?
Lasting Powers of Attorney (LPAs) ensure you’re safe in the knowledge that if for any reason you become unable to make decisions yourself, someone you trust will act on your instructions. There are 2 types of Lasting Powers of Attorney, a Property and Financial Affairs LPA and a Health and Welfare LPA.
Property and Financial Affairs LPA – With this type of LPA the person/people you choose to be your attorney will be able to make decisions relating to your property and financial affairs based around your instructions.
This includes managing your bank or building society account, your investments, pensions or benefits, paying your bills or buying, selling or maintaining your property, essentially anything that has to do with your property and finances.
Health and Welfare LPA – This type of LPA empowers your chosen attorney to make decisions about your daily routine. For example washing, dressing, eating, medical care, where you live and anything that has to do with your health and welfare. This also includes any serious decisions such as whether you should stay on a life sustaining treatment or not, should anything happen to you.
Business Lasting Power of Attorney – A Business Lasting Power of Attorney can be used if, for example, a business owner is abroad on holiday or for business and has had an accident which means they are no longer capable of acting, or has an incapacitating medical condition that means they are no longer capable of acting/carrying out their duties.
What are Attorneys?
Attorneys are the individuals that you choose to deal with your Lasting Powers of Attorney. These should be people you trust and work well together. For absolute certainty that your instructions will be carried out to the letter we always advise appointing a professional Attorney – for example, a Solicitor.
Should anything happen to your original Attorney(s) you can also include Replacement Attorneys to safeguard your documents.
Why are Lasting Powers of Attorney important?
1: Peace of mind
Many people believe that if they ever lose mental capacity or they are physically unable to deal with their finances or health and welfare, their “next of kin” will automatically be able to make these decisions. This is not the case.
If you do not have LPAs in place, your closest will need to apply to the Court of Protection to get access to your finances, which is a lengthy and expensive process. There is also the possibility that those applying to act for you may not be the people you would choose to be involved in your finances.
By creating LPAs you decide who makes those decisions for you in advance and they will be carried out by the people you trust.
2: Flexibility
An alternative to a Property and Financial Affairs LPA is an Original Power of Attorney.
An Original Power of Attorney only lasts for 12 months and is invalid should you ever lose mental capacity. Therefore, it is restrictive in nature and is not as flexible as an LPA. An Original Power of Attorney also only covers your finances.
Furthermore, an alternative to a Health and Welfare Lasting Power of Attorney is a Living Will. A Living Will can only detail your instructions as to medical treatment.
A Health and Welfare LPA provides your attorney(s) with the authority to make decisions about all aspects of your health and welfare related matters, such as where you live, what you wear and your general welfare needs, as well as enabling your attorneys to make decisions about medical treatment
3: You can make a Health and Welfare Lasting Power of Attorney
Should you ever lose mental capacity and not have a Health and Welfare LPA in place, the Court of Protection is very reluctant to grant a Health and Welfare Deputyship routinely and will only agree to such an order if there is a significant issue in dispute or a pattern of ongoing disputes.
Trying to obtain a Health and Welfare Deputyship can be a very stressful, expensive and lengthy ordeal, which you may not want your nearest and dearest to have to go through.
Furthermore, should you have to move into a care home the Local Authority deems a Health and Welfare LPA sufficient legal authority for your trusted Attorney to decide where you live, i.e. should your Attorney decide that you should move into a better care home, they have the legal authority to do so.
4: You can include preferences and instructions
If there is something that you feel strongly about and you wish to include as a preference or instruction for your Attorney(s) to follow, then you are able to do so.
For example this may include whether or not you wish to stay on a life sustaining treatment or prefer to live in a care home. Your legal advisor should also be able to advise you about preferences and instructions that should be included in your LPAs to assist your Attorney(s) in implementing their legal responsibilities and duties.
5: Practicality
Did you know that your Property and Financial Affairs LPA can also be used even if you still have mental capacity. For example, if you have mental capacity but are unable to deal with your finances because you are abroad or are physically incapable of going out or even when you are temporarily in hospital.
This is a very useful and practical feature of an LPA, as you can instruct one your Attorney(s) to carry out an action in your absence, for example pay a bill and they are able to do so without needing your presence or signature. When you do have mental capacity, your Attorneys can only act with your consent.
6: Protection
LPAs are governed by the Mental Capacity Act. What this means is that your Attorney(s) have serious legal responsibilities they need to comply with. The most important one is that they need to act in your best interests.
Any breach of those legal responsibilities and duties, for example misuse of money or decisions that are not in the best interests of the person they are responsible for, then your Attorney(s) can be reported to the Office of The Public Guardian.
LPAs give you that added protection should anyone think there is something untoward happening with your finances or with your care.
7: You can revoke them
If you have mental capacity you can revoke your LPAs. If for example you have changed your mind as whom to appoint as your Attorney(s)/Replacement Attorney(s) then you can revoke them and make new ones. There are several reasons why you may wish to amend your LPAs, so your initial decisions are not set in stone.
8: You can make a Lasting Power of Attorney for your Business
It is always best to make a separate LPA for your Business, so that you can appoint separate Attorney(s) to avoid any potential conflict of interests.
If you are a sole trader, your business is not likely to have a separate legal entity from you, so a Business LPA is an effective way to ensure business continuity.
If you are a partner in a partnership that has several partners, then this will depend upon on the terms of the partnership agreement, as to whether or not a Business LPA is a necessity.
If you are a director of a company, then it depends on the company’s articles of association. Your legal advisor will be able to assist you as to the way best way forward.
9: Timing
As soon as an individual owns an asset, at whatever age, they should make an LPA. Recent events have shown us that no-one knows what the future may hold. In these uncertain times, we recommend you make Lasting Powers of Attorney as soon as possible.
That way they can be created and verified by someone (for example, a doctor, a solicitor or someone that has known you for two years or more) whilst you have mental capacity.
10: Control
You can choose how your original Attorney(s) act. Should your original Attorney(s) be unable to act then you can choose when your replacement attorney(s) should step in and how you wish them to act.
This gives you real control and an order of preference as to whom you wish to appoint and in which instances. If you do not have LPAs in place and your closest applied through the Court of Protection, then the court decides who takes control of your affairs.
Be certain, click here to contact a member of our friendly and highly professional Private Client team today to arrange an appointment to discuss your LPAs and have peace of mind knowing that whatever the future may hold, you have a plan in place.
