Last month I wrote about the implications of not having a “Lasting Powers of Attorney” in place and outlined the financial costs involved. Today I highlight some of the key considerations in drawing up an LPA.

The most obvious point that needs re-stating is that you can only set up a “Lasting Power of Attorney” when you have the mental capacity to do so. Once you have lost capacity it is too late.

Your representative should only ever make a choice for you if you’re unable to make that specific decision at the time it needs to be made. For example, if you fall into a coma, your representative would start looking after your affairs. Should you subsequently wake from the coma, you may be able to make your own decisions again.

Consider appointing different attorneys for health and finance. Your closest relatives may be the obvious choice to make decisions about health but, depending upon the complexity of your finances, they may not be best placed to handle this aspect.

You can appoint more than one attorney on each LPA. You will then need to decide how they can act:

• jointly,
• jointly and severally or
• jointly in some matters and jointly and severally in others

Attorneys acting jointly and severally means they can either act together or independently.

I would also add two further considerations in drawing up a LPA

1.  Discretionary Fund Management

Many people these days are using the expertise of Discretionary Fund Management (DFM) to run their pension and investment portfolios.

A LPA needs to include a specific clause allowing the attorney to continue to use a DFM. Without it, the attorney bears a greatly increased burden of making those decisions without necessarily having the experience or expertise.

2.  Entrepreneurial Business owner

For the business owner, it may be beneficial to have two financial LPA’s, one for your private finances and one specifically for the business. Your personal attorneys may not have the necessary expertise to run your business interests, which the family unit may rely on to continue receiving the financial support from these assets. Equally, a professional contact may be best placed to deal with your business interests but you may not want them having access to more personal information.

So consult your lawyer and put appropriate LPAs in place as soon as possible to protect you and your family at what will be a most distressing time.

 

Nigel Taylor Cert PFS, Dip FA

This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case. It does not constitute legal or tax advice and must not be treated as such. Richmond House Wealth Management does not offer legal advice. The Financial Conduct Authority does not regulate legal services.