Before I answer that it’s probably best to talk about what a Lasting Power of Attorney (LPA) is. It’s a document that allows you to appoint someone to make decisions for you if and when you lose mental capacity, say through an accident or illness. Don’t just think dementia, think cancer, car crash, falling down the stairs. Do you know anybody that’s happened to? I bet you do, and I bet they, like you, thought it would never happen to them.
So generally, if you lose mental capacity and you don’t have a valid LPA in place, you still might think you could rely on your husband, wife, boyfriend, girlfriend, mum, dad, brother, sister (I could go on, but you get the point, those that you trust and are close to you) to make decisions for you. Well, you couldn’t be further from the truth.
Someone would need to make an application to the Court of Protection for a Deputyship Order to act on your behalf. Assuming they are successful, the process can be very expensive and take anywhere between 3-6 months, and then the applicant might not even be someone you would have chosen.In the meantime, a social worker or healthcare professional would make decisions for you based on what they think is in your best interests. Do you think that will work for you? I didn’t think so. Worse still, your loved ones won’t be able to access your finances that you may need for your care. There’s a double whammy in that you might even see joint accounts frozen while the Court of Protection satisfies itself that the money you are accessing is actually yours and not your partner’s or spouse’s even though you are joint account holders. No, you didn’t misread that, it could really happen. Ignore that at your peril because if you knowingly proceed to use the account thinking nobody will find out, think again.
So that’s all your personal stuff and of course I haven’t even gone into health and welfare issues yet. But the title talks about Business LPAs and whether you need to have one of those as well as a personal LPA. The straight forward answer is, if you have a business, or at least business interests, then yes you do ought to do both.
It’s unlikely that the most appropriate person to make personal property and finance decisions for you is going to be the most appropriate person to make business decisions for you. An example may be, if you are a lawyer and you are married, it might be perfectly plausible to appoint your wife as your primary attorney to make personal decisions for you, but unless she is also a lawyer she may not be the best person to make decisions about your law firm. Makes sense? Possibly when it’s as black and white as that example, but life isn’t always that straightforward so always take advice.
Another reason for making a separate LPA for business decisions is The Office of the Public Guardian has rejected attempts to appoint different attorneys to make decisions regarding personal and business affairs on a single form, not to mention having to wade through some 300 pages of the Code of Practice for the Mental Capacity Act 2005 to find a list (though not exhaustive) on the types of decisions a property and financial affairs attorney might make.Proceed with caution, make sure you get the right legal advice. Different business structures require different considerations. Don’t leave your business interests to chance. Call to find out how we can help.
This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitor before decisions are made and before you embark on a certain course of action.
Penn Chambers Solicitors
0207 183 1485