Head injuries can occur in a wide variety of circumstances, such as in a skiing or cycling accident, and our brain is not immune to illnesses, such as cancer or dementia. Any health problem involving the brain may mean that you would be unable to carry out many tasks, sometimes for an extended period, so it is only natural to ponder who would run your financial affairs should you become mentally or physically incapacitated.
One possible answer is to have a lasting power of attorney, which enables you to name someone to manage your financial affairs while you are out of action, as James Woods in our private client team in Heathfield, East Sussex explains.
A financial lasting power of attorney is a legally binding document which lets you (the donor) choose one or more individuals that you trust to act as your attorney or attorneys to make financial decisions on your behalf if you lose mental capacity or if you do not want to make decisions for yourself any more.
This includes dealing with issues such as:
- managing your bank and savings accounts;
- handling your investments;
- paying your bills, including HM Revenue & Customs, your employees, suppliers, and any loan or mortgage payments that might be owing;
- applying for benefits;
- organising repairs to a property;
- buying and selling property.
You are adjudged to have mental capacity if you are able to make and understand the implication of your decisions at the time they are required to be made, and to be able to adequately communicate them.
You can opt to have family members, friends or professionals to act as your attorneys, provided they are aged over 18, are mentally capable and are not bankrupt or subject to a debt relief order. They can carry out their duties for as long as you are unable to manage your affairs for yourself.
The main benefit of a financial lasting power of attorney is that you can outline in the document precisely how you would like your affairs to be managed. You can also give guidance to your attorneys and place any restrictions on them you feel are required.
If you become incapacitated and you do not have a financial lasting power of attorney in place, an application would need to be made to the Court of Protection to have a professional appointed as your deputy to run your affairs. This procedure can take many months and is much more expensive than registering a financial lasting power of attorney.
How a solicitor can help
Although you can draw up your own financial lasting power of attorney using the Office of the Public Guardian’s online service, this has its risks as all your financial affairs will be at stake and important safeguarding provisions could be omitted from the LPA. Drafting a lasting power of attorney can be complex and if you make an error this could prove costly for you and your loved ones.
It is highly advisable, therefore, to seek legal help in drafting your financial lasting power of attorney. A specialist private client solicitor can ensure that you have thought about all the implications, help you decide who to appoint as an attorney, advise you on any necessary restrictions. They will also ensure that the final version of your financial lasting power of attorney is legally binding and registered, and that it precisely reflects your wishes.
For more information, please contact our private client team on 01435 890 101 or email James Woods at jameswoods@hugheslaw.co.uk.
This article is for general information purposes only and does not constitute legal or professional advice. Please note that the law may have changed since the date this article was published.