A Lasting Power of Attorney (LPA) is a very important document that allows you to appoint people who you personally know and trust, or professionals, to make decisions on your behalf and look after your best interests should you lose capacity.

There are two main types of LPA. A Property & Financial Affairs LPA covers your financial decisions, whereas a Health & Welfare LPA allows someone to make decisions about your personal health and care. 

An LPA is a legal form but completing one doesn’t have to be a daunting task. Let’s clear up some of the legal jargon used on the forms!

1. Donor

You! This is the person who is making the LPA and appointing people to make decisions on their behalf in the event of their incapacity. They are the ‘donor’ of the power.

2. Attorney

The attorneys are the people who the donor appoints to make decisions on their behalf. You can have a single attorney or multiple attorneys acting together. It is also possible to appoint professional attorneys, but make sure you talk to them about their fees first.

The attorneys you choose must be over 18 at the time the LPA is signed and must have mental capacity. If you are making a Property & Financial Affairs LPA your attorney cannot be bankrupt or subject to a debt relief order, but this doesn’t matter for Health & Welfare.

As the donor you get to decide how the attorneys act if you have appointed multiple people. This could be jointly so they must make all decisions together, or ‘jointly and severally’ so they can make decisions together or individual attorneys can make decisions alone. There is also a third option that combines these two. This allows you to state that some decisions have to be made jointly, and everything else jointly and severally.

3. Certificate Provider

This is the person who signs your LPA to confirm that you have capacity and you aren’t subject to any fraud or being pressured into making it. There are two categories of certificate provider; personal and profession.

A certificate provider acting in a person capacity must be someone who has known you for at least two years. This cannot be a member of your family, so good choices may be a friend or neighbour.

A professional does not need to have known you for two years, but they must have relevant professional skills. This could be your GP, a solicitor, or your Estate Planner.

There is quite a long list of people who can’t act as your certificate provider. Your Estate Planner will be able to give you advice on who is appropriate.

4. People to notify

These are the people you name on your LPA because you want them to be informed when the LPA is sent off to the Office of the Public Guardian (OPG) to be registered. They will each receive a form letting them know about the pending registration, and they will then have 3 weeks to raise any concerns about this with the OPG.

The form they receive sets out the grounds they could object to the registration on. For example, they believe you revoked your LPA while you still had capacity, or they believe the LPA was not valid because you didn’t have capacity to make it.

You don’t have to name any people to notify on the form, but it’s a good safeguard if you are choosing not to register your LPA straight away!

5. Life-sustaining treatment

This is only relevant to the Health & Welfare LPA. Life-sustaining treatment is any treatment that the person providing your medical care believes is necessary to sustain your life. It’s up to your doctor to decide whether treatment is life-sustaining.

What jumps to mind when asked about life-sustaining treatment? If you immediately thought of emergency surgery or ventilation you aren’t alone, and you wouldn’t be wrong. But did you know that what treatment is ‘life-sustaining’ depends entirely on your circumstances? What may not be life-sustaining for one person may be life-sustaining for you. A common example is a simple prescription of antibiotics.

In your Health & Welfare LPA you must state whether your attorneys can or cannot make decisions about life-sustaining treatment. This is a big decision, and if you want to grant your attorneys this power it’s a good idea to talk to them about any treatment preferences you might have.

Business Lasting Power of Attorney

If you have a business or businesses, have you considered what would happen if you were to lose capacity? 

A business LPA differs from personal LPA’s because it will be tailored according to the business and considers its articles of association along with shareholder agreements or partnerships agreements. 

You can put an LPA in place for your business should you become unable to make decisions due to unavailability i.e. holidaying abroad, illness, accident or simply due to a loss of capacity. The power vested in your chosen attorney would allow them to continue running the business, paying salaries to staff, sign cheques, access the business account or even pay bills. 

A business can either be run in the capacity as a sole trader, partnership or even a limited company. Let’s look at each of these in more detail. 

Sole Trader

In this instance, it is likely that the business is owned and therefore controlled by you. If you do not have provisions put in place in the event of loss of capacity or simply because you are unable to make a decision due to illness or injury, no one will be able to continue to make important business decisions on your behalf unless you have an LPA in place. 

Partnership 

If the business is set up as a partnership, there may be a partnership agreement in place which determines what happens if you are no long able to make decisions. It is advisable to check for this first before an LPA is drawn up first to prevent any conflict between the 2 documents. 

Limited Company

If you are a director of a Limited Company, you will have articles of association in place which again could contain certain provisions with regards to what could happen if you or another one of you co- directors becomes incapacitated.  

How do you go about making an LPA for your business?  

You would have an LPA for Property and Financial Affairs but ensure this LPA is limited to business decisions only so, for example,  

“My attorneys only have the authority to use my business accounts and make decisions relating to my business. They are not permitted to use my personal account or make decisions about my personal finances.” 

In your personal LPA you would specify 

“My attorneys only have the authority to use my personal bank account. They are not permitted to access my business account or make any decisions relating to my business.” 

This makes it clear to your attorneys where the authority starts and ends. 

Who should act as an attorney in your LPA?  

A family member or friend may not have the expertise knowledge to continue making business decisions, so you can either appoint a professional (which will have an associated fee) or even your business partner if you feel this is the right decision. Effectively, it needs to be someone you trust, understands your business and shares the same or similar business goals. 

What happens if no LPA has been put in place for your business?

If you own a business, lose capacity and there is no LPA in place, it is likely the bank will freeze the business accounts. It also means the only way forward would be for someone on your behalf to make an application to the Court of Protection and apply for a Deputyship Order. This can take up to 6 months and can be very expensive. This then has the snowball impact of no-one being able to make crucial business decisions during this time frame – how will staff be paid, stock purchased? 

Capacity can be lost at any time and could be due to either an accident, a stroke or a deteriorating condition so please don’t wait until it’s too late or your business could be severely disrupted. 

 Did you know? 

• There is no such thing as a business LPA 
• There can be restrictions in articles of association or shareholders agreement as to who can be an attorney so this should be checked first before the LPA is drawn up/ 
• If you want the same attorneys to make decisions relating to your business and personal affairs, only 1 property and financial affairs LPA is needed and no specific wording is required. 

If you would like to speak to an adviser to find out more about LPAs please click here.