In a population that is living longer, one of the major considerations has to be 'who will look after me when I'm older or unable to live independently?' and whilst the thought of not being independent is not necessarily the easiest to think about or the most comforting, it is something everyone should give some consideration to.
In addition to personal affairs, commercial property and business interests may be left in limbo if you become incapacitated physically or mentally, leaving you unable to continue to work or make major decisions in your company.
Lasting Powers of Attorney (LPAs) can provide you with that little bit of comfort and control about the future without necessarily forcing specific decisions to be made, and can allow businesses to continue to run efficiently.
There are two separate types of Lasting Powers of Attorney, the first dealing with Health & Welfare and the second dealing with Property & Financial Affairs. The documents are prepared and signed by you and ultimately registered with the Office of the Public Guardian (OPG) to be used by another person(s), known as an Attorney, at some point in the future if and when needed.
Each LPA allows you (the Donor) to make up to four Attorney appointments. They will have the responsibility of making decisions regarding the Donor's Property & Finances or Health & Welfare.
In addition, any number of Replacement Attorneys can also be appointed, to step in when one or more of the initially appointed Attorneys are unable to continue to act, for what ever reason.
Each LPA, allows a Donor to include details of how they may wish or require their Property & Finances or Health & Welfare to be dealt with by the Attorneys.
Then each of the appointed Attorneys and Replacement Attorneys sign the documentation confirming they understand their role and responsibility as an Attorney
The Mental Capacity Act 2005 and Mental Capacity Act Code of Conduct, set out the role and responsibilities of Attorneys and how they can and should act.
The main point being, that any Attorney acting on behalf of a Donor is in a privileged position and must act in the best interests of the Donor at all times. This means that any Attorney appointed should be someone the Donor can trust at a time when they are most vulnerable, to put the Donor's interests first, protect assets and property, as well as look after the Donor's welfare.
Property & Financial Affairs
An Attorney acting under a registered LPA for Property and Financial Affairs, will have the authority to deal with a Donor's assets, including bank accounts, investments and property, as well as having the ability to manage income, bills and tax affairs on the Donor's behalf.
LPAs for Property & Finances, can also deal with business interests and assets, as well as personal finances, if drafted correctly. Alternatively a specific business LPA could also be prepared to allow Attorneys to solely have powers in respect of business interests and assets.
Health & Welfare
An Attorney acting under a registered LPA for Health and Welfare, will have the authority to make decisions regarding a Donor's future medical treatment, accommodation and day to day care. An Attorney, will however, only be able to make these decisions, if a Donor looses capacity and became unable to make those decisions for themselves.
Office of the Public Guardian
The OPG's role is to safeguard and manage the risk to vulnerable adults in England and Wales, who lack the capacity to make decisions regarding property, finances and welfare themselves. The OPG also maintain a register of LPAs and have the ability to deal with concerns raised over Attorney conduct.
This additional safeguard should mean that a Donor can have absolute trust that their welfare and assets will be protected at all times.
Without LPAs in place, if you loose capacity, those who wish to act on your behalf would have to apply to the Court to obtain a court order, known as a Deputyship Order, to have authority to make any decision on your behalf. This is a long and expensive process, which could be avoided by having valid LPAs in place, just in case!
We all hope that we will never be in the position to need someone to take care of us and make decisions on our behalf, but without a crystal ball to know what the future holds, LPAs can help avoid the uncertainly and stress.
Originally published 30 June, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.