Lasting power of attorney explained for personal and business affairs

Life is unpredictable. Whether through illness, a stroke, or a serious accident, there may come a time when you're no longer able to make decisions about your healthcare, finances, or business matters.

A lasting power of attorney (LPA) is a proactive legal document that allows you to nominate a trusted individual (or individuals) to make decisions on your behalf while you still have mental capacity.

To explore your options and get straightforward advice, contact our solicitors about setting up a lasting power of attorney.

What is a lasting power of attorney?

An LPA empowers you (the donor) to appoint someone you trust—typically a relative, friend, or solicitor—to take charge of important decisions if your mental capacity declines. You can appoint one or several attorneys, but it must be done while you still have capacity.

Understanding mental capacity

In the context of LPAs, mental capacity refers to your ability to make everyday decisions—whether about your finances or healthcare. Under the Mental Capacity Act 2005, a person is considered unable to make a decision if they cannot:

• Understand the information relevant to the decision.
   
• Retain that information long enough to make a decision.
   
• Use or weigh the information as part of the decision-making process.
   
• Communicate their decision.

Establishing an LPA while you have full capacity ensures that future decisions genuinely reflect your wishes.

Why should you make an LPA?

Though it may feel uncomfortable to imagine needing someone else to take over, the need for an LPA can arise suddenly.

• Unforeseen health issues – A stroke, the onset of dementia, or an accident could all trigger the need for an LPA.
   
• Peace of mind – You can appoint someone you trust to handle your affairs if you're unable to do so.
   
• Avoiding difficulty and cost – Without an LPA, your loved ones would have to apply to the Court of Protection for deputyship. This is slow, expensive, and may not result in the person you'd have chosen taking charge.

An LPA isn't just a precaution—it's protection for you and your family.

What happens without an LPA?

If you lose capacity without an LPA in place:

• Your family will need to apply for deputyship through the Court of Protection.
   
• This process can take months and comes with significant legal costs.
   
• The court may appoint someone who doesn't reflect your personal wishes.

What types of LPAs are there?

There are two types of LPA:

1. Health and welfare LPA: Covers decisions about your healthcare, living arrangements, and treatment and only takes effect when you've lost mental capacity

2. Property and financial affairs LPA: Covers decisions about money, property, and financial matters—like paying bills or managing bank accounts, and can be used while you still have capacity (if you choose) or only after it's lost

Who can set up an LPA?

Anyone aged 18 or over with full mental capacity can make an LPA. You don't need to be ill or elderly—setting one up is a sensible way to prepare for the future and protect your interests.

LPAs for business owners

For business owners, the risks of losing capacity extend beyond personal matters. Customers, employees, and partners may all be affected. A business LPA is a type of financial LPA focused on managing your business affairs.

Considerations depending on business type

• Sole traders – Your personal and business assets are usually intertwined. A business LPA ensures continuity if you lose capacity.
   
• Partnerships – Review your partnership agreement. If it's silent or unclear on incapacity, a business LPA may be needed to avoid disruption.
   
• Company directors – Check your articles of association. Many larger companies have removal or replacement clauses, but these often don't account for temporary incapacity. Small private companies, particularly with sole directors, may lack such provisions entirely, making a business LPA essential.

Separate LPAs for personal and business matters

It's often best to set up two distinct LPAs: one for your personal life and one for your business. A combined LPA may create conflicts of interest or uncertainty about the attorney's powers.

The benefits of making an LPA

Whether for personal wellbeing or business continuity, an LPA offers clear advantages:

• Control and clarity – You decide who acts for you and what powers they have.
   
• Efficiency and cost saving – Avoids the delays and costs of a Court of Protection application.
   
• Peace of mind – You and your loved ones know your affairs will be looked after.
   
• Flexibility – LPAs can be updated or revoked as your circumstances change.

A lasting power of attorney is key to futureproofing your life and business. By appointing trusted attorneys, you protect your healthcare, finances, and commercial interests—ensuring decisions are made by those who understand your values and priorities.

Contact our LPA solicitors

Setting up both personal and business LPAs means you're protected, your family is reassured, and your business can carry on if the unexpected happens.

Our solicitors can help you draft personal and business LPAs tailored to your needs. We have offices in Eastbourne, Brighton, London, Uckfield, Hastings and Ulverston and help clients nationwide.