Lasting Powers of Attorney required for Income Drawdown Pensions

About 1.7 million retirees could be at risk of a later life financial crisis by 2025 becuase they have not set up a Lasting Power of Attorney (LPA), a provider has warned.

 

According to Zurich, four in five retirees (79 per cent) in pension income drawdown are without power of attorney, meaning their families could be prevented from helping them manage their finances should they become too ill or incapacitated to do it themselves.

Setting up LPA means giving a family member or friend the legal authority to make decisions on an individuals behalf at the loss of a person’s own ability, for instance when they lose mental capacity.

Zurich interviewed 742 people who have moved into income drawdown since the pension freedoms, between December 2017 and January 2018.

It found more than 345,000 retirees using drawdown to fund their retirement have not set this facility up for themselves, equating to a potential 1.7 million over the next 10 years.

The outcomes could be drastic, with next-of-kin individuals forced to apply to the courts to take charge of a relative’s finances should they fall ill.

Zurich said the problem was exacerbated by the pension freedoms, which meant twice as many people are now choosing income drawdown over annuities, giving them the responsibility of managing their income in retirement.

A spokesman at Zurich commented: “Thousands of people are now making complex decisions on their pension into old age, when the risk of developing a sudden illness or condition such as dementia increases”

“Despite this, many are unprepared for a sudden health shock or a decline in their mental abilities. The time to set up a LPA is well before you need it, and pension providers should be highlighting this to their customers.”

According to the Alzheimer’s Society, there are 850,000 people currently living with dementia in the UK. This could increase to one million by 2025, and potentially double to two million by 2051.

Despite this, Zurich found a mere one in five (21 per cent) people who have moved into income drawdown since the pension reforms were introduced, have registered an LPA.

However, it did find that people with a financial adviser were almost four times more likely to have an LPA than those who had not sought advice (66 per cent vs 17 per cent).

A spokesperson at The Alzheimer’s Society indicated the stigma around the LPA was compounded by its links to mental capacity, as individuals are generally reluctant to consider a future where they may not be able to make their own decisions.

But she said: “In cases where LPAs are not in place, assets and equity may be lost, or those in a vulnerable position may be forced to make decisions they are no longer able to make.”

“We need to get to the stage where a LPA is taken out as a standard practice, with financial services advising people to do this as early as possible.”

There are two types of LPA, one covering health and welfare and the other covering property and financial affairs.

Both types of LPAs are extremely important, as whilst it’s possible to get a deputyship after the event, it is impossible to manage a pension income drawdown strategy where the pension holder has lost capacity, without a LPA in place.

 

Contact us here to discuss how we can help set up your Lasting Powers of Attorney

 

 

More than 5 million adults ‘ Perplexed by Wills’

New research by Royal London has revealed that 5.4 million adults without a will in the UK would not know where to begin if they were to write one. 

 

The data also showed that 59% of parents either do not have a will, or currently have one that is out of date.

Royal London says it is “especially important” for parents to have an up to date will so that if the worst were to happen, their children would be brought up by who they choose.

The research also found that since writing a will just under a third (31%) experienced a “significant life event” such as marriage or having a baby, yet more than half (53%) have not updated their will.

Royal London says that many people do not realise that if they were to marry, any previous will is automatically invalidated and is no longer of any value, “so it’s vital that wills are reviewed and kept up to date.”

More than half (54%) of the adult population do not have a will in place.

Of those who do not have a will one in four (24%) admitted they had no intention of making one, compared to a third (34%) who said that an illness would encourage them to do so.

Using the services of a solicitor is the most popular way of writing a will, with two thirds (68%) using legal assistance.

A spokesperson for Royal London commented: “It is incredibly important to have a will, not just to protect your finances but to make sure vital decisions, such as who will look after your children, are noted.”

“Once you have a will you should update it after any significant life events that could affect your financial situation such as getting married, divorced or starting a family”

“Taking these important steps allows you to have peace of mind knowing that when you’re gone your wishes will be met.”

 

Contact us here to discuss how we can help professionally write your Will.

 

Lasting Powers of Attorney – Investigations into Attorneys and Deputies up 45%

Investigations into the actions of attorneys and deputies appointed under the Lasting Power of Attorney (LPA) procedure soared by more than 45% in the past year, figures have revealed.

 

According to figures from the Office of the Public Guardian (OPG) 1,729 investigations into the actions of attorneys and deputies were carried out in the 2017/2018 financial year – up from 1,199 the previous year. The Office of the Public Guardian (OPG) is a part of the Ministry of Justice (MOJ) responsible for administering LPA’s.

The figures were published after a FOI request by pensions and investment firm Royal London. The company had noted a rise in ‘DIY and online submissions’ for LPA’s, potentially leaving people at risk of attorneys making mistakes or, ‘in the worst cases, abuse’. Royal London has called for more information and education on what duties and powers individuals can and cannot do under a power of attorney.

Helen Morrissey, personal finance specialist at Royal London, says: “When done properly, the attorney fulfils a vital role in safeguarding the interests of the person they are acting for. However, the sheer number of investigations into the actions of attorneys is concerning and action needs to be taken to curb poor practice.”

She adds: “While there have been instances where people appointed as attorneys have used their position to steal money from the person they are acting for, there are also instances where the attorney has unwittingly stepped beyond the boundaries of their responsibilities or have neglected to keep up to date records explaining what they have done and why. People taking on these responsibilities need clearer guidance on what they can and cannot do.”

While many mistakes may be innocent, the Office for the Public Guardian has the power to suspend attorneys and deputies if it suspects foul play. In the most serious cases attorneys have been jailed for their actions.

LPA agreements allow ‘attorneys’ – often a person known to the individual setting up the LPA (the ‘donor’), to manage their health & welfare and property &  financial affairs should they lose the mental capacity to do it themselves. If an LPA is not agreed by the time a person loses mental capacity, deputies are appointed by the Court of Protection, which is usually an expensive and lengthy process.

Creating a LPA without expert legal advice could result in thousands of pounds of costs later down the line to rectify mistakes and leave people susceptible to financial abuse. Involving a legal expert in the process of creating and registering an LPA ensures that the donor’s best interests have been accounted for. It also ensures that a donor has considered all options and if necessary, put in protection clauses in the LPA. This specialist approach can minimise bad practice and improve desired outcomes for those individuals at risk from incapacity in the future.

 

Contact us here to book a no obligation consultation to discuss your LPA requirement’s .

 

Why are more Wills being contested?

There has been an increase in the number of Wills being disputed by family members. Why is this happening and what can you do to try to ensure your assets to go where you want them to?

 

A death in the family can either bring a family closer together or tear it apart.

English law allows testators (people who make a Will) to make a Will leaving their worldly goods to whomever they chose, whether this be family members, friends or a charity.

Over the last couple of years, there has been a rise in the number of claims being brought by disappointed family members under the Inheritance (Provision for Family and Dependents) Act 1975.

This Act enables certain categories of people to make a claim against an estate on the basis that the deceased’s Will (or the intestacy rules if the deceased died without making a Will) fails to make reasonable financial provision for them.

 

There are several reasons behind this increase:

Illot v Mitson

First, in March 2017 the Supreme Court handed down its high profile judgement in Illot v Mitson. This case was the subject of many column inches in the national press.

It was a case about a mother and daughter who had been estranged for 26 years. When the mother died, she left her estate to three animal charities and nothing to her daughter. Her daughter brought a claim under the Act, arguing that the Will failed to make reasonable financial provision for her maintenance.

 

Concept of maintenance

Claims under the Act by non-spouses revolve around this concept of maintenance. Broadly speaking, maintenance means payments to meet the claimant’s recurring daily living expenses. In considering a claim, the Judge must consider and regard the claimant’s financial needs, as well as those of the beneficiaries.

Contrary to popular belief, the Act is not designed to hand out windfalls or to undo what a disappointed child may perceive as a grave injustice of being left out.

Despite how it was widely reported in the press, Illot v Mitson did not really create new law – instead it applied the Act to the very specific facts of that case.

The claimant and her husband had a minimal income and were dependent on state benefits. They had five children. They resided in a housing association property. Because her financial position was so dire, her claim succeeded. Had she been financially independent, she almost certainly would not have done so.

While Illot v Mitson had not set the precedent that was widely reported in the press, what it has done is raise public awareness of the existence of the Act. This in turn has led more people seeking legal advice and an increase in the number of such claims being issued.

 

Complex families

Secondly, we now live in a society where modern families are more complex. Second marriages are increasingly common, which creates a tension between the new spouse, the testator’s children from their first marriage and the testator’s stepchildren.

The Act enables not only children to make a claim but also spouses, civil partners, co-habitees, people treated as a child of the family and any other person who was being maintained by the deceased. Ultimately it is for the testator to do whatever they like with their estate, but careful drafting is needed to address those tensions and being mindful of a potential challenge under the Act.

 

House price rises

In addition, property prices have increased exponentially over the last 20 years, meaning that even a modest house is now worth a considerable amount of money. This can create certain expectations within families of what people are likely to receive.

When there are sizeable assets at stake, people will invest money to pursue a claim in the hope of receiving a bigger share of the estate. Claims under the Act necessarily come at a difficult time, following the loss of a loved one, and the stress and costs of litigation at this vulnerable point can lead to settlements – even of cases without enough merit.

 

Preparing your own Will (DIY Will)

Furthermore, the proliferation of the internet and the temptation to prepare your own Will using an online toolkit without the benefit of a legal professional can also lead to a testator’s true intentions not being conveyed. Again, this can spark dispute if someone has been told one thing, but the actual Will does not achieve that end.

Finally, there is the human factor. Many probate disputes are about much more than dividing up the financial assets. A death can cause all manner of historically held grievances within a family to be aired, which entrenches positions and further increases the likelihood of a claim being made.

 

Minimising the risk of Will disputes

So, what can a testator do to try and minimise the risk of their estate being fought over by family after they have gone? Having difficult conversations to manage expectations is a good starting point – if someone knows that they will not be inheriting a significant sum and the reasons for this, they are less likely to contest this decision than if this later comes as a nasty surprise.

If that is a conversation that cannot be had, the testator can explain the position in a letter of wishes. This document is not legally binding but gives the testator the opportunity to speak from beyond the grave and explain the reasoning behind their decisions. Such a letter may make a disappointed family member think twice before challenging a Will.  Using a professional Will writer to write your Will helps avoid undesired future outcomes and helps protect against any potential disputes on your assets and estate.

 

Contact us here to discuss how we can professionally write your Will.

 

 

How can I protect my children’s inheritance?

Without the correct ‘Bloodline Planning’ :

• Your spouse/partner and children may not inherit your share of a business

• Some or all of your children’s or grandchildren’s (Bloodline’s) inheritance may be lost

• Assets distributed to beneficiaries exposes those assets to risk

 

Assets not protected by a Trust face attack from :

• The divorce or separation settlements of future generations

• Creditors or bankruptcy claims

• Further inheritance tax bills

 

How can I protect my children’s inheritance ?

Or more commonly known as ‘Bloodline Planning’

‘Bloodline Planning’ is ensuring that your assets reach your children, grandchildren and other relatives, rather than ending up in the wrong hands.

When assets are distributed to beneficiaries, (ie they receive cash, property or others assets as a direct lump sum payment) so much can be lost. These assets are then considered to be part of the Beneficiary’s estate and be would be at risk of attack from any future Divorce Settlements, Creditors and Taxation.

U-PLAN can ensure that your children and grandchildren are able to benefit completely from the inheritance you want them to receive and at the same time, protect the family home and other assets from being lost to the costs of long term care.

Consideration should be given to what might happen if your surviving spouse were to remarry. How would this effect your own children if he/she later changed their Will in favour of the new spouse and any subsequent children?

Or, for those of you who already have children from a previous marriage, how do you ensure that they would get their fair share?

What if your children are very young or have special care needs? How can you ensure that they are fully provided for?

There may also be a business you have worked hard to build up. Logic and common sense say you would want to protect this for your family too?

Do you really want to leave it all to chance, when with our professional help to set up the correct type of planning – all these problems could be solved?

Our expertise will ensure that your assets are both fully protected from attack and immediately available to your loved ones after you are gone.

 

Asset Planning in your lifetime

Some estate planning can be made whilst you are alive. Assets could potentially be gifted to Beneficiaries before your death. The could prove extremely tax efficient in terms of Inheritance Tax, as assets gifted away are fully outside of the Donors estate seven years after the gift is made.

However, rather than gifting assets absolutely, as this would mean that these assets will again be potentially at risk from Divorce, Creditors and Long Term Care Costs, as well as adding value to the recipients estate, it would be sensible to consider gifting with the aid of Discretionary Trusts. The Discretionary Gift Trust means that, although you make a Gift to your children and grandchildren, the asset need not enter their own estate; thus protecting these assets from any possible claims on them in the future.

By Gifting to a Trust, the Donor retains full control but, can not have access to the funds.
Even if the Donor never received any benefit, but potentially could, the Gift is classed as a ‘Gift With Reservation Of Benefit’ (GWR) and the full value is deemed to be in the Donor’s estate at death for Inheritance Tax purposes, not just the initial Gift. The Gift Trust ensures that a spouse, children, grandchildren and any other named Beneficiaries can benefit at the Trustee’s discretion.

 

Access to protected assets

We recommend a Discretionary Trust called a probate trust which, while still protecting assets from attack from Care Costs, allows the Settlor access to the assets held in the Trust. The trust has a memorandum of wishes where the Settlor is also a Beneficiary. The purpose for utilising this Trust will be for ‘ Bloodline Planning’ and not Inheritance Tax Planning, as a transfer of asset by the Settlor would be a GWR.

The main uses for a Family Probate Trust are the assignment of investment bonds to ensure it will pass to those intended without the need to wait for Probate. In addition, for a single/widowed client, a proportion of the main residence can be conveyed into our Probate Trust, which can protect the house from the costs of care. Individual advice would be required as to whether this is an appropriate course of action.

 

Utilising Trusts for ‘Bloodline Planning’ 

It has been established that your children/grandchildren future inheritance can be at risk from a number of issues. Taxation is one, but inheritances can be impacted from a number of other more emotional issues such as Care Costs, where an estate can be reduced significantly in value to pay for these costs. Family homes may have to be sold, and income and investments drained, seriously reducing any subsequent inheritance.

 

Family circumstances can also be a concern

It my be that there are some family members you would wish to benefit and some that you would not. A classic scenario would be an individual who has married into the family, but who you wouldn’t want to benefit from your estate. Family disputes do occur and Divorce and/or Remarriage can greatly influence who inherits and by how much.

Subsequently, if on inheriting monies, an individual then divorces, that same inheritance is at risk.
Similarly, if an individual inherits assets but then is later subjected to bankruptcy proceedings, or has creditor liabilities, then the whole inheritance is at risk.

The correct Trusts can provide the protection and control of a multitude of assets from those risks noted before. This protection can extend from the family home, to investment products and family businesses.

There are two potential scenarios where planning can be made with Trusts. One is during your lifetime and the other is in preparation for your death. We can utilise a range of Trusts in conjunction with the Will, which will ensure that your hard earned assets are fully protected for your children and grandchildren. By its very nature, this type of planning is wholly dependant on your individual wishes, requirements and the value of your estate.

 

Contact us here to discuss how we can help with Bloodline Planning.

 

U-PLAN has changed office address.

U-PLAN has changed its operational office address. After enjoying our time in Wilmslow, we have moved into brand new offices in the Cheshire town of Poynton. Our clients can come in and meet with us in the new offices, or continue to benefit from free home visit consultations.

Click here to book your free office or home consultation.

The true cost of not having a Lasting Power Of Attorney in place.

Contrary to popular belief, no individual has an automatic right to manage someone else’s finances, even if they are related to them, or are their spouse or civil partner.

So, what happens when you can’t manage your financial affairs due to ill health and nothing has been put in place? The truth is it’s an expensive, lengthy and time-consuming problem to resolve.

For many individuals, Wills and LPA’s ( lasting power of attorney ) along with many financial products, sit in the category of ‘I will do it tomorrow’ and often it takes a professional adviser to give the person the nudge required for them to take the necessary action.

 

State of health

Many health conditions prevent people from being able to manage their finances. The two most common are dementia and stroke, and the numbers are quite stark. Some 2% of people aged 65 to 69 have dementia, by age 85 to 89 it’s 20%. And, there are approximately 152,000 strokes in the UK every year.

A sensible approach should be that when any individual puts in place a financial product for themselves, they should also explore what would happen if they were unable to deal with their financial affairs themselves.

This is because if you are no longer able to manage your finances due to health reasons, no one else can do it for you without legal authority. This is also true if you have joint bank accounts.

Most people assume that if their partner suffered a stroke or developed dementia then they could carry on operating the account and would have access to things like their pension income which may go through that account.

However, guidance from the British Bankers’ Association means that banks will often freeze joint accounts if one of the account holders is mentally incapable unless a lasting power of attorney is in place or a Court of Protection order has been obtained. The reason given by the banks is that joint accounts can only operate if there is continuing agreement of both parties – plainly this can’t happen if one party is not capable of agreement.

 

The Court of Protection

So, without a lasting power of attorney the first thing that must happen is someone will need to apply to the Court of Protection for a ‘property and financial affairs deputy order’. This allows a deputy or preferably deputies to deal with your finances.

It is advisable for more than one person to apply, because if only one deputy is appointed, and they couldn’t act for any reason (for example, being on holiday, becoming bankrupt or death), then you would be back to square one.

Appointments are usually made ‘jointly and severally’, which means that any one deputy is able to act independently at any time.

The Court of Protection prefers family and friends to be deputies, however, if there are family disagreements or if your assets are complex, it may be best to appoint a solicitor or legal professional.

While the court forms are available on Gov.uk many people do ask solicitors or legal professionals for assistance as the process is complex. The court require information regarding your assets, income and liabilities, a medical certificate and a declaration by each deputy to confirm they are suitable and will undertake their duties properly. It’s worth noting that many NHS doctors will not complete the medical certificate, and those who do may charge up to £300.

Typically, it takes about a month to obtain the information and complete the forms.

 

Typical costs.

Some £400 is payable to the court, and it takes a further month for the court to issue the formal application. Your proposed deputies need to notify various family members, including yourself, even though you may not understand. This gives everyone a chance to object to the appointment of a deputy. You plainly have no control over who might do so.

Assuming no objection, the court requires an insurance bond which pays out should a deputy illegally take your money. For £300,000 cover the annual premium is about £225. With the bond in place the court issues the property and financial affairs deputy order along with guidance for the deputies.

A separate bank account needs setting up to manage your financial affairs. And your deputies will send the order to all the institutions that you have dealings with.

The Office of the Public Guardian will charge a fee of £100 to consider what supervision level the new deputies should be allocated to. There is also an annual supervision fee of £320 year for assets of over £21,000 and £35 if less.

This whole process takes about six months and is considerably more expensive than having a lasting power of attorney in place before a need arises as the typical example in the table below shows.

The table also shows an indicative cost for a single individual, based on one year and five years, being an indicative life expectancy. It assumes legal advice is taken for both matters. It also assumes no on going legal support.

 

Financial Lasting Power of Attorney Fees Attorney via Court of Protection Fees
Year 1 Year 1
Solicitor (inc VAT) £780 Solicitor (inc VAT) £2,100
Court Application £82 Court Application £400
Medical Certificate £300
Supervision level £320
Insurance Bond £225
Year 1 total £864 £3,345
Subsequent years £0 Annual Supervision Level £320
Annual Insurance Bond £225
5 year total £864 £5,525

 

 To talk to us about setting up your own LPA, please contact us here.

 

Planning ahead – Health & Welfare.

Around one third of people in the UK have made no provision for old age, whether through a pension, writing a will, saving for retirement, making funeral plans or creating a lasting power of attorney, according to new research.

By 2025, more than 13 million people who are at risk of mental incapacity will be unprepared, with no legal or medical plans in place for their future care.

The taboo remains –talking about death and end of life is putting individuals and their families at great risk of a whole range of problems in the future.

It is true that more and more of us are putting wills in place and establishing plans for finances and assets, however far too few of us are planning ahead for our health and care needs and wishes, leaving this to chance.

Planning ahead by talking to family or friends shouldn’t be seen as doom and gloom, it’s about having a positive conversation about welfare, empowering your loved ones and making the decision-making process easier for everyone.

 

Planning ahead

Dementia is the biggest single cause of death in England and Wales and the number given a diagnosis of the condition has risen by 54 per cent in ten years. While three quarters of the population fear dementia or the loss of capacity to make decisions, 97 per cent have not made relevant legal provision.

Planning ahead is surrounded by worrying misconceptions. Some 65 per cent of people incorrectly believe they can leave decisions to their next of kin, without making the decisive legal steps to ensure that happens.

There are currently 928,000 health and welfare lasting powers of attorney (LPAs) registered with the Office of the Public Guardian (OPG) across England and Wales, compared to the 12 million people over the age of 65 who run the risk of developing dementia – a difference of nearly 93 per cent.

This disparity will continue, leaving millions in limbo. By 2025, it’s estimated that more than 15 million people will be at risk of mental incapacity and only an estimated two million health and welfare LPAs will be in place.

Jeremy Hughes, the chief executive of Alzheimer’s Society, recently commented on this issue: “Lasting powers of attorney for health and welfare too often get overlooked. People with dementia have the right to make choices about their care, just like anyone else. Making someone they trust their attorney for health and welfare is one of the ways people can do this ”

“A health and welfare LPA provides reassurance to them and the act of creating one can start useful conversations about the future with family and friends.”

Contact us here to find out how we can help you with a Health & Welfare LPA

 

 

Why a professionally written Will is so important

Everybody knows the importance of having a Will, as this is something that is often highlighted to us, but what isn’t often mentioned is the importance of making sure that Will is properly written and therefore legally binding.

Yet, a Will written incorrectly, or not properly witnessed, could be equal to not having written a Will at all, leaving your loved ones with a legacy of taxes, paperwork and legal bills.

So, what constitutes an incorrectly written Will? There are various details that could invalidate a Will or cause undue additional problems; from something as simple as spelling someone’s name incorrectly and not using their legal name, to a Will whereby the specific wording fails to meet requirements. Whilst you would assume that if you went to a high street solicitor or even purchased a Will writing kit online the wording would be correct, you could be wrong.

“I only have a small inheritance to leave, so will be fine to do my own DIY Will” – often people think this is the case, until they speak to a professional and discover important truths, that there are more complexities and aspects to their estate than they first thought. Not only is there the issue of what you own and choose to leave to your loved ones, but how do you factor in if someone in your Will dies, divorces, re-marries, has more children, step-children…the list goes on.

Re-marriage is just one example of where things can get complicated – if you leave everything to your spouse and their Will states that they then pass everything on to your/their children equally after their death, you might assume that would mean that your spouse and children are looked after? This assumption is where problems can and do exist within inadequately written Wills.

Take this example:

Jennifer’s father dies, after he dies his estate is passed to his wife Barbara (Jennifer’s stepmother), Barbara had written a mirror Will of her husband’s stating that the estate would be passed equally between Jennifer and her own son. However, after the death of Jennifer’s father Barbara remarried, changed her Will and left everything to her son and new step children and nothing to Jennifer. This is perfectly legal, but morally was it the right thing to do and would Jennifer’s father have approved?

By using a legal professional that isn’t necessarily an expert in the field of Will writing, or using a DIY Will Writing Kit, you run the risk of having an invalidated Will, and not just this, even if your Will is perfectly valid, it does not mean you have received the best advice and strategy possible regarding your desired outcomes for you and your loved ones in the future.

 Contact us here and find out how we can help with your Will. 

 

Your Business and the Protection of a LPA ( Lasting Power Of Attorney)

Business continuity is one of the key elements in business planning. As a business owner the main objective is to ensure the efficient running of the business in the event of any disruption which could happen if you were unable to make decisions. This may be if:

  • You were to have an accident
  • You have a medical condition that incapacitated you
  • You were abroad on holiday or business

 

What would you do if you couldn’t make the day to day decisions?

An alarming fact that very few business owners realise, is that once they are unable to manage their own day to day business affairs, there is no one else ( not even your closest family member) that is automatically given the power or legal authority to deal with these business affairs on your behalf. Access and operation of the financial affairs of the business including using the bank accounts is not permissible. Without a Business LPA in place it is possible that:

  • Bank accounts would be frozen particularly those with overdraft facilities
  • Uncompleted transactions would not be finalised
  • Contracts become voidable
  • Stock could not be purchased
  • Employees salaries are not paid
  • Creditors do not get paid
  • Loans default
  • Rent or mortgages go into arrears

Without a Business LPA in place an application would have to be made to the court of protection to appoint someone to run the business, a process that usually takes months and costs thousands of pounds. The business may be irreparably damaged due its financial and operational failings by the time this decision is made. The court makes the decision on who should be appointed to run the business, not the business owner. This may result in a individual being appointed who the business owner does not approve of or prefer.

 

A Business Lasting Power of Attorney

Having someone that has the legal authority to deal with these matters can be essential to the health and survival of the business without any delays. By putting a Business LPA in place you appoint an individual (Attorney) you trust to deal with your affairs whenever you need them to act on your behalf. It makes sense to appoint someone who is familiar with the business, this could be a business associate or partner or may even be a family member who understands the business.

You can choose how many Attorneys you would like to appoint and it is possible to appoint just one Attorney. However, if this Attorney dies or becomes mentally incapable or even bankrupt, then the power ends and you would need to make a new document again provided you are able to do so. It is always advisable to appoint a replacement Attorney in the event that the first and only Attorney is unable to act.

Alternatively, you can appoint two or more Attorneys and you may choose on how they act on your behalf:

  • Jointly – this means they will always act together. This ensures that your Attorneys will have to agree on everything and act together at all times. If one of them is unable to act or dies, then the power ends because the other Attorney cannot act alone.
  • Jointly & Severally – this means that your Attorneys can act together but can also act independently of each other if necessary. This type of appointment is more flexible because if one Attorneys is unable to act, the other has a right to act on their own.
  • Jointly in some matters & jointly and severally in other matters. This means you can specify when your Attorneys should act jointly and when they should act jointly and severally. Again, the power would be limited as some matters could only be dealt with jointly, as mentioned above.

 

When can an Attorney act?

A Business LPA can be used as soon as it is registered with the Office of the Public Guardian, regardless of your mental capacity, provided there are no restrictions.

Whilst you are still mentally capable, you make decisions regarding your business affairs yourself. Your appointed Attorney will carry out your wishes if you can not carry them out yourself or if you instruct them to deal with some matters on your behalf, provided you have not restricted the power to be valid only if you lose mental capacity.

If you have lost the capacity to make the decisions yourself, your appointed Attorney will make and carry out the decisions on your behalf. As long as you are still able to make decisions on your own behalf, you can revoke a Business LPA at any time and you do not need to give a reason.

 

What type of business benefits from a Business LPA?

Sole Traders, Partnerships and Limited Companies all benefit from a Business LPA, however ownership structures differ from within these different business types and from business to business. With this is mind, our small business service offers a free initial consultation with you to ensure we clearly understand you, your business and your continuity plans. A Business LPA is also a tax allowable expense, so it would make sense to contact us and explore how we can help safeguard your business today.

 

BUSINESS OWNERS can contact us here.