The Importance Of Lasting Powers Of Attorney
It is never too soon to set up Lasting Powers of Attorney, advises Jane Burbridge of Forbes Solicitors
The pandemic has brought to light the importance of having measures in place to enable your family to access and manage your finances in the unfortunate case that you are unable to do so yourself.
It’s not an easy conversation to have but it really does pay to plan ahead and set up Lasting Powers of Attorney (LPA) sooner rather than later. Not just for the instances that you or someone you love is diagnosed with a progressive illness such as dementia in later life, but earlier on in your life too.
Research shows that 65 per cent of us think our next-of-kin will make medical and care decisions for us if we are no longer able to. That is not the case without a Health and Welfare LPA being in place, this enables them to make decisions about social care issues and medical treatment, including life sustaining treatment. Unfortunately, it is estimated only 22 per cent of people in the UK have an LPA.
There are not only problems dealing with your personal finances and making medical and care decisions, what about the business you are involved with?
Most businesses have undergone crisis management – identifying and preparing for probable risks, such as floods, computer hacks or theft. However, fewer businesses consider preparations for significant business decision-makers being incapacitated.
Without a business LPA in place, certain risks arise. For example, if one of the bank account signatories lacks capacity, the bank could freeze the account. If there is an overdraft, the possibility of the bank freezing the account is greater. Contracts entered by a person who had capacity but now lacks it, may become unenforceable owing to their incapacity. Paying creditors, employees or tax becomes difficult as does running the business generally with a businessperson who now lacks capacity. Investors may require their investments to be returned.
The time to consider making LPAs – for personal finances, health and welfare or business – is when you are fit and able. It is never too soon to make an LPA. However, if something happens which results in you losing your mental capacity, it is too late. An application would then need to be made to the Court of Protection to have a deputy appointed. You would have no say in who applies to be your deputy, the process may take months or longer and, in the case of a business, during that time the business is exposed to uncertainty of survival.
At Forbes Solicitors we can help guide you through the steps of making a Lasting Power of Attorney to help you decide what would happen if you could not make decisions for yourself and needed support managing your affairs.
Jane Burbidge, Partner in Wills, Tax, Trust & Probate
01772 220156
jane.burbidge@forbessolicitors.co.uk
forbessolicitors.co.uk
