The ever-changing restrictions being placed on individuals and their businesses remain at the forefront of many people’s minds.
We have seen a surge in clients contacting us as a result of key decision makers being ‘unavailable’ due to having to self-isolate or having contracted Covid-19, and in some cases lacking capacity to make certain decisions themselves.
This can prove challenging for businesses, sometimes creating issues with the payment of wages to staff and invoices. Individuals are also affected by these restrictions, often having to self-isolate or being stuck in another country, and this can create practical issues of its own when it comes to dealing with your affairs.
In order for someone (an attorney or deputy) to have access to or to deal with property belonging to another person (the donor), the attorney or deputy must have the proper legal authority to act. Where the donor has mental capacity, the legal authority can be provided by the donor in a general (or an ordinary) power of attorney or a lasting power of attorney.
Where the person who needs assistance lacks mental capacity, they must have either put an enduring or lasting power of attorney in place, or the Court of Protection must be asked to appoint a deputy. It takes at least 20 weeks for a lasting power of attorney to be completed to the point where the attorneys can act, and at present 12 months for a deputy to be appointed.
General powers of attorney allow a donor to appoint people to make property or financial decisions on their behalf. The powers granted can be decision and time-specific. However, general powers of attorney cannot be used once a person has lost capacity.
If you own a business, you may want to make two lasting powers of attorney for property and finance – one for your personal affairs and one for the management of the business assets. Running a business may take different skills to looking after your own money, so you can appoint different attorneys under each document.
Our advice is that everyone, but business owners especially, needs to be aware that the time to decide who to appoint as your attorneys is while you are well and do not need help. It is a ‘rainy day’ measure.
- Acting now to put in place any powers of attorney that may be needed
- Remember that lasting powers are better than ordinary powers, except in the case of some specific transactions which are likely to completed quickly. The ordinary powers are not effective if you lose capacity
- Consider putting in place both types of lasting powers of attorney – property and finance as well as health and welfare
- If you own a business, consider a separate lasting power to manage the business as well as the one for your personal finances. You can have different attorneys in each