Lasting Powers of Attorney
A Lasting Power of Attorney (LPA) is a legal document that allows you to choose people to act on your behalf, should you later begin to lose your ability to manage your personal affairs because of physical or mental incapacity. It takes effect, if need be, during your lifetime and is completely separate to a Will.
Creating a LPA gives you the reassurance that you know who’ll make decisions for you if you cannot make them yourself. That person will be someone you know and trust to act in your best interests. Having the LPA in places saves considerable expense and time should your family later need to make decisions for you.
An LPA is a legal document in which you, the donor, appoint one or more people (your attorneys) to make decisions for you. There are two types of LPA: one deals with your property and financial affairs, and the other with health and welfare issues.
Anyone aged 18 or over can make an LPA. You must make it as an individual – you cannot make a joint LPA. Anyone making an LPA must have mental capacity when making it.
LPAs cover people in England and Wales. An LPA made here may not be useable in any other country (including Scotland and Northern Ireland).
LPAs replaced Enduring Powers of Attorney (EPAs) in 2007. It’s no longer possible to make an EPA, but existing EPAs made before 1st October 2007 remain valid. A valid EPA can usually be used by the attorney at any time, with the donor’s knowledge and permission. However, if you begin to lose your mental capacity to manage your own affairs, your attorney becomes under a duty to register the EPA with the Office of the Public Guardian (OPG). The attorney cannot then use the Power of attorney until the registration is complete. EPAs only relate to property and financial affairs.
An LPA can be created at any time while you have mental capacity, but can only be used once it has been registered with the OPG.
This type of LPA provides the attorney with the authority to make decisions regarding your property and financial affairs. It can be created to suit your circumstances and can include, if you wish, restrictions on the powers you grant to your attorney(s).
Your attorney(s) will largely be able to make the same decisions as you normally would, such as paying bills, making or selling investments, collecting benefits or selling your home. They cannot however, make substantial cash gifts on your behalf.
A Property and Financial Affairs LPA is legally effective as soon as it’s registered with OPG, if you consent to your attorney acting for you. Otherwise, the LPA can only be used by your attorney without your permission once you lose the capacity to make your own decisions. While you have the necessary capacity, the LPA doesn’t in any way prevent you from continuing to manage your own affairs should you wish
This type of LPA provides your attorney(s) with authority to make decisions regarding personal issues, such as where you live or the type of care you receive. It can be expressly tailored to your circumstances. You can give your attorney the power to give or refuse consent for medical treatment, including an express statement about life sustaining treatment.
If you’ve already made a “living Will” (also known as an Advanced Treatment Directive or Advance Medical Decision) you should seek legal advice on how it will interact with, or be superseded by, a Health and Welfare LPA.
A Health or Welfare LPA must be registered with the OPG before it can be used. The registration may be done at any time. However, unlike a property and Financial affairs LPA, this type of LPA can only be used once you no longer have the capacity to manage your affairs yourself.
You can choose up to four attorneys to act on your behalf, provided they are 18 or over. A Property or Financial Affairs LPA cannot appoint an attorney who is declared bankrupt at the time the form is signed.
If you appoint more than one attorney, you’ll have to decide whether they must act together at all times, or whether they can act independently of each other.
It is important that your chosen attorneys agree to taking on this role and know what is involved. The attorneys should be people whom you trust to act in your best interests.
You can nominate substitute attorneys to act in the event that your first choice attorneys cannot act for any reasons.
This LPA specifically deals with a person’s business interest as opposed to their personal property and affairs.
The requirement for a business LPA will be different depending on the structure of your business:
Sole Trader – the business is unlikely to have a sperate legal entity. Appointing an Attorney ensures continuity of the business if you are incapacitated.
Partnership – The partnership agreement might set out what happens if a partner is incapacitated. If not, a business LPA may be of assistance but care needs to be taken to ensure that the provisions do not conflict with provisions in the partnership agreement.
Directors of a company – the articles of association often provide for the termination of a director’s appointment is he/she loses capacity. A review of the articles will ensure that a provision such as this is included where relearnt. A business LPA would be appropriate for a sole director of a small private company because if the articles of association terminate the appointment, there would be no one available to continue running the company.
For more information contact a member of the team via the Enquiry form or call 01633 603178.
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