Lasting Powers of Attorney- Frequently Asked Questions

A Lasting Power of Attorney (LPA) is a legal document which gives someone you trust the authority to make decisions on your behalf, if and when you choose and also if you were unable to deal with your affairs due to an accident or illness.

There are two types of LPA, a Property and Financial Affairs LPA and  a Health and Welfare LPA.

Property and Financial Affairs LPA

A Property and Financial Affairs LPA is for financial decisions such as buying and selling property, paying bills, running bank accounts and dealing with investments.  You can choose whether you wish your attorney to act while you still have mental capacity or whether the document is only to come into force if you lose capacity.

Health and Care Welfare

The Health and Welfare LPA covers decisions such as your medical care and where you should live and your attorney can only use this when you no longer have mental capacity.

You can only set up an LPA while you are still mentally capable to do so and it must be registered with the Office of the public Guardian before it is used.

Lisa Baker sets out a few of the recent issues which clients have raised when discussing Lasting Powers of Attorney:

I have an old style Enduring Power of Attorney, do I need to set up a Lasting Power of Attorney in respect of Property and Affairs?

No, provided the Enduring Power of Attorney (EPA) has been validly signed when it was set up and this was done before October 2007 then the EPA is perfectly valid.

An EPA only needs to be registered at the point when you start to lose capacity.

How should I appoint the attorneys?

If you appoint the attorneys to act together, (this used to be called jointly), all three attorneys have to agree on a decision.

This has the disadvantage that if one of the attorneys is no longer capable of acting or dies then the document is no longer valid unless a replacement attorney is appointed.

If the attorneys are appointed separately or together, (it used to be called jointly and severally), the attorneys can make decisions on their own or with the other attorneys. If one of the attorneys dies the other attorneys can carry on and act on your behalf.

Can my daughter who lives in Australia be my attorney?

The answer to this is yes. However if your daughter had to carry out something for you in person, this would of course be more difficult. A financial institution would also need to carry out an evidence of identity check which would be more difficult for an Attorney who is abroad.

I want my niece to be appointed as my attorney for property and financial affairs but I don’t want her to act until I am no longer capable of acting.

You may set up the LPA so that it will only take effect when you do not have capacity to manage your property and financial affairs

I own a business, should I set up an LPA in respect of the business?

If you are a sole trader, partner or a company director, would your business be able to continue if you were incapacitated by illness or injury or even if you were stranded abroad?

If the answer to this question is no, you should consider putting a LPA in place to appoint someone to deal with your business in this event.

Your appointed attorney would then be able to take over the running of the business. Without this being in place, it may prove difficult to buy stock and for suppliers and employees to be paid.

If you are a partner or company director, as well as setting up the LPA, we would also need to review the partnership agreement or articles of association and any shareholder agreements to ensure that they meet the needs of the business in the event of incapacity. If there is no LPA in place a Deputy may need to be appointed which can take around 6 months or longer, what would happen to your business during this period?

What happens when I die?

The LPA will no longer be valid. The executors of your estate will have the authority to deal with your estate.

If you would like to discuss any of the issues raised please e-mail Lisa on lisabaker@chadlaw.co.uk or telephone on 0113 225 8803