A Lasting Power of Attorney is a legal document that allows you to appoint one or more people to make decisions on your behalf during your lifetime. The people you appoint to manage your affairs are called the Attorneys. A Lasting Power of Attorney is a completely separate legal document to your Will although many people put them in place at the same time as getting their Will written, as part of wanting to plan for the future.
Having a LPA in place can allow your attorney to have authority to deal with your finances and property as well as make decisions about your health and welfare. Your Lasting Power of Attorney can include binding instructions together with general preferences for your attorney to consider. Your Lasting Power of Attorney should reflect your particular wishes so you know that the things that matter most would be taken care of.
It is advisable to put a Lasting Power of Attorney (LPA) in place whilst you are capable of understanding the nature and effect of the document i.e. you have the required legal capacity. After this point, you cannot enter into a LPA and no one can do so on your behalf.
Couples should consider having identical Lasting Powers of Attorneys so that they can appoint each other to make decisions about each other’s financial affairs and health issues; should one of them lose capacity to do so.
There are two types of Lasting Power of Attorney;
Health and Welfare Lasting Power of Attorney
Property and Financial Affairs Lasting Power of Attorney
A Health and Welfare LPA allows you to name the person to make decisions about your healthcare, treatments and living arrangements if you lose the ability to make those decisions yourself. Unlike the Property and Financial Affairs LPA, this document will only ever become effective if you lack the mental capacity to make decisions for yourself.
If you can’t communicate your wishes, you could end up in a care home when you may have preferred to stay in your own home. You may also receive medical treatments or be put into a nursing home that you would have refused, if only you had the opportunity to express your wish. However if you have appointed an Attorney appointed by the Lasting Power of Attorney, they will speak for you and ensure that your wishes are followed.
A Property and Financial Affairs LPA allows you to name the person to deal with all your property and financial assets in England and Wales. The Lasting Power of Attorney document can be restricted so it can only be used if you were to lose mental capacity, or it can be used more widely, such as if you suffer from illness, have mobility issues, or if you spend time outside the UK.
LPAs for Sole Traders and SME Business Owners
What would happen to your business if you lost the ability to deal with your own business affairs and make decisions?
What if you have a business bank account in your name as a sole trader or joint bank accounts with other business owners which require the signatures of all the named account holders?
How would your business finances be managed on a daily basis in the event of an accident or illness?
Having a Lasting Power of Attorney could mean the difference between your business continuing or going out of business.