WHY YOU MAY NEED TO CONSIDER A LASTING POWER OF ATTORNEY IF YOU HAVE INVESTMENTS
Nobody likes to think that they may one day lack the ability to look after themselves. The sad fact is this can happen to anyone, at any time, as the result of an accident or illness. This makes Lasting Powers of Attorney (LPA) an extremely useful tool, as they help you to ensure that both your welfare and assets are looked after in the way you would wish.
What is a Lasting Power of Attorney?
LPAs are legally binding documents, which assign one or more trusted people (Attorney’s) to help you make decisions or to make decisions on your behalf.
The person granting an LPA (Donor) can set up one or both of the following LPA’s:
These documents are very important as they will safeguard you and your assets from predatory third parties if you find yourself in a vulnerable situation. They will also make sure that your affairs are smoothly and effectively managed when you cannot attend to them.
Who can be an Attorney?
An Attorney can be any adult person that you trust. Acting as an Attorney is a great responsibility so some people will nominate a professional attorney, but this is not always necessary. It can be appropriate for family members and/or friends to act as your attorney, in which case you can provide specific guidance to explain their duties and what they can and cannot do with these powers. For example, if you have pensions and investments you will need to include express clauses within your Financial Affairs LPA to give your Attorney permission to ratify your existing financial advisers or appoint new advisers if necessary. Without such clauses your investments will be in limbo and could even become frozen until an application can be made to Court.
What happens if there is not an LPA?
In this situation, your relatives may need to apply to the Court for a Deputyship Order, which will give them the power to make decisions on your behalf. This can be costly and time consuming. As well as providing extra stress to your family at what will already be a difficult time, you might find that the person looking after your affairs is not the person you would choose yourself.
Do I need legal advice to set up an LPA?
It is important to get expert advice on the drafting and execution of your LPA’s to ensure that the provisions made are both appropriate and legally enforceable.
This article was kindly contributed by:
Senior Consultant Solicitor
Allard Bailey Family Law
If you believe that you can benefit from a Lasting Power of Attorney, or wish to discuss the appropriateness of one, then in the first instance please contact you usual GHC adviser to discuss.