Reasons to make a Power of Attorney
What is a Power of Attorney
Lasting Powers of Attorney – A LPA is a document you can preparing appointing one person, or several people, to manage your affairs if it ever reached the stage where you are no longer able to. There are two types of LPA – one to cover your property and financial affairs and one covering health and welfare decisions.
Enduring Power of Attorney – EPA’s were replaced in October 2007 by LPAs however if you made an EPA prior to the change in the law, this may still be used. If you are an attorney acting for someone under an EPA and you feel that person is starting to lose, or has lost, the ability to make decisions regarding their own finances, you should register the document at the Office of the Public Guardian.
Why is it needed?
There is a common misconception that your ‘next of kin’ will be able to speak up for you and manage your affairs if you are no longer able to do this yourself. Unfortunately, this is not the case and even if you are married your spouse has no automatic legal right to look after your affairs for you.
If you have previously made a valid Enduring Power of Attorney this can still be used however you should be aware that this only applies to your property and financial affairs and you should put in place a Lasting Power of Attorney for health and welfare if you wish for your attorneys to assist you all affairs.
What happens if I don’t make a LPA and I become unable to manage my own affairs?
In those circumstances an application would be needed to the Court of Protection and the Court can appoint a Deputy for you. This will not necessarily be the person you may have appointed yourself. Applications to the Court of Protection are likely to be much costlier than a LPA as well as having a longer timescale to complete. In addition to this, the Court of Protection involves yearly fees as well as more administration for the Deputy (the person managing your affairs).
When should you make a LPA?
The best time to make the LPA is whilst you are healthy, and no question can be asked about your ability to understand the document. The LPA includes a certificate which much be signed by an independent person to confirm that you fully understand the implications of making the LPA.
If you are suffering from the early stages of a progressive illness, you should seek to put in place the LPA as soon as possible to avoid a situation where you are no longer able to make one.
When can it be used?
The LPA must be registered with a body called the Office of the Public Guardian before it can be used. The LPA for property and finances can be used as soon as it has been registered (with your permission) or if you no longer have the ability to make decisions regarding your own property and finances. The LPA for health and welfare differs in that in can only be used if you are unable to make decisions about your own health and welfare.
For you …
It is a good idea to put in place both types of LPA to protect your own personal affairs should it ever reach the stage where you are no longer able to make decisions yourself.
For your Business …
If you own your own business, or have a share in a business, you may need to consider putting in place a LPA for property and finances to cover your business arrangements. If you unexpectedly are no longer able to manage your own finances, what would happen to your business or how would your interest in a business be affected.
It is commonly thought that your LPA for property and finances will cover your business affairs. This is not the case and you should have separate LPAs to cover your personal and business affairs.Get in touch