There are any number of reasons why you may need someone to look after your affairs at some stage in your life.
This may be temporary, and you simply require someone to pay your bills or sign documents on your behalf while you are hospitalised or on holiday.
Or it may be long term, due to developing dementia, or physical difficulties as a result of a stroke or other illness, or due to an accident. In these circumstances, you may be unable to make your own decisions about your health or finances. Further, even if you remain in good health, you may want to have someone who can help you with the paperwork of managing your finances.
Either way, a power of attorney can help by appointing someone to act on your behalf in relation to your health, finances, welfare, property or business.
A power of attorney is a legal document in which you (‘the donor’) appoint someone (‘the attorney’) to act on your behalf and in your name.
There are two types of power of attorney: an ordinary power of attorney and a lasting power of attorney.
An ordinary power of attorney can be used in a wide range of circumstances and for a specific period of time.
This form of power of attorney is only used when you have the mental capacity to make decisions but, for some reason, you are unavailable to act in person. This may be because you are overseas for an extended period or in hospital for a length of time.
A general power of attorney can be ‘general’ (meaning it does not limit the attorney’s remit) or ‘limited’ i.e. restricted to specific affairs.
This type of power of attorney is simple to complete and does not need to be registered to be valid.
An ordinary power of attorney is only valid whilst you have mental capacity.
An LPA is a legal document where you appoint one or more people to make decisions and act on your behalf. The difference between an LPA and an ordinary power of attorney is that if you lose mental capacity the LPA will continue in effect.
It may be difficult to think that you might lose mental capacity one day, but it is reassuring to know that if you do your wishes are being managed by someone you trust.
Many people assume that their spouse, partner or children can make decisions on their behalf if a life-changing medical condition or accident happens. This is not the case, as they do not have the legal authority to do so without an LPA.
Keep in mind, that once you sign the LPA you don’t suddenly lose control over your affairs. You can choose whether the LPA can be used before or only when you lose mental capacity.
There are two types of LPA: health and welfare, and property and financial affairs. These are separate documents.
We can also help with a specialist LPA to cover your business affairs, as you may want different attorneys dealing with your business to those dealing with your personal affairs.
An enduring power of attorney (EPA) was a document to appoint an attorney to help manage your property, money and financial affairs.
Like an LPA, your attorney will be able to make decisions on your behalf if, for example, you are unable to do so due to an accident or becoming ill.
The EPA was replaced with the property and financial affairs LPA in October 2007. Those created before that time are still valid and can be used.
If you made an EPA that was signed and witnessed before October 2007, we can advise on whether registration is needed. You can then choose either to continue to use it or cancel it and make a property and financial affairs LPA.
If someone wants to manage your affairs, because you have lost mental capacity and do not have an LPA or EPA in place, that person needs to apply to the Court of Protection. This process is significantly costlier and lengthier than appointing an attorney through an LPA and can take six months or more. However, we can guide you through the process so it is dealt with as swiftly and efficiently as possible.
Your relatives would make an application to the Court of Protection to be your ‘deputy’ and the court would approve the appointment.
We can also advise on statutory will applications to the Court of Protection. This is required where someone no longer has the testamentary capacity to change their will. We can also advise on other Court of Protection applications, such as having lifetime gifts approved for Inheritance Tax purposes.