A Power of Attorney is a formal document which allows you to appoint another person (or persons) to make decisions on your behalf, either in relation to your personal, business or Trust affairs.
A General Power of Attorney can be a very useful tool to cover situations where you may, for example, be out of the country and unable to sign crucial paperwork to complete a deal, or a property purchase. A General Power of Attorney is a short-term solution and can often be prepared by our team very quickly to assist with time critical matters. A General Power of Attorney cannot be used if you lose mental capacity.
A Lasting Power of Attorney (LPA) is a more detailed document which will continue to be valid in the event that you should lose the ability to manage your affairs or make important decisions in the future due to mental incapacity.
There are two different types of LPA. A Property and Finances LPA allows you to appoint a person (or persons) to manage your financial affairs on your behalf as if they were you. A Health and Welfare LPA allows you to appoint a person (or persons) to make decisions about your health and welfare. A Health and Welfare LPA can come into effect in the event that you develop Alzheimer's or dementia, or suffer a brain injury. Alternatively, they can be used where you are only physically restricted from taking certain actions, for example if you have a prolonged stay in hospital.
In the event that an LPA is not in place and you lose the ability to make decisions yourself, your options are very limited. You may be left in a position where your finances can no longer be accessed or controlled by you and the only alternative is for someone to be appointed by the Court of Protection to manage your affairs on your behalf. You lose the ability to choose who this person should be (anyone may apply provided that they can show the Court that they are responsible) and the Court process is lengthy and costly. The burden inevitably passes to your loved ones to attempt to gain some control but this can be extremely difficult when they may already be struggling to care for your health needs without access to any financial resources.
Similarly, without a Health and Welfare LPA in place, your relatives or next of kin may be unable to access important medical or care records or make decisions on your behalf about your day-to-day care. This could become a significant issue if you should require residential care in the future.
We are able to lead you through the process of putting in place LPAs for both your financial affairs and health and welfare, from choosing who your attorneys should be right through to offering advice on using the LPA should it become necessary. We strongly recommend that everyone should have a LPA in place once they reach the age of 18, but we find that many of our clients are not familiar with these documents. We recommend preparing them alongside Wills as a holistic way to plan for their future.
Our team can also advise on LPAs in a business context for clients who own or run a company. If a director of a company becomes incapacitated it can bring a sudden halt to the day-to-day running of the organisation, particularly if that director is a signatory for financial or other matters. These documents need careful and unambiguous drafting to ensure that the chosen attorney(s) have the necessary level of control.
Lasting Powers of Attorney is part of Shoosmiths’ wider private wealth offering. If you would like help finding the right team or lawyer please contact us on +44 (0)3700 863 000 or contact us by email to [email protected].
