Lasting Powers of Attorneys for business and professional affairs

16 March 2021

Lasting Powers of Attorney (LPAs) are vitally important documents. Our previous blogs have touched upon what LPAs are and top tips for anyone planning on putting an LPA in place. Most individuals should at least put in place a financial LPA to cover their home and personal finances. It is however a good idea in some cases to have a second financial LPA.


A second financial LPA is extremely useful where you have a business (e.g. as a sole trader) or a professional career and you want (or are required) to keep the assets and affairs of the business or profession separate to your own.

You may be entirely comfortable with having a family member or friend manage your personal property, bank accounts and investments. You may not however wish for these same people to be in control of your professional affairs.

There are numerous professions where you may have accounts or records which are within your control but do not constitute part of your own personal affairs. For example, many psychotherapists, psychiatrists and regulated health professionals are expected to ensure that their professional affairs are in order so that if anything were to happen to them, an appropriate person would be able to pick up the reins. Chances are the appropriate person in this situation would be a colleague or at least someone you trust within the industry, as they would have the expertise and familiarity needed to conduct such affairs.

It is easy to put in place separate financial LPAs covering (i) your personal and (ii) your professional affairs. It simply requires:

  1. Appointing the right people as attorneys in each case (likely to be different individuals in each LPA); and
  2. Including wording in the professional LPA to make it clear that your attorneys only have the authority to use your business accounts and make decisions relating to your professional role. Your attorneys under this LPA are not permitted to use your personal accounts or to make decisions about your personal property and finances, in respect of which you have executed a separate LPA.

Similarly, your personal LPA should include wording to the effect that your attorneys will have general authority to act in relation to all your property and affairs except any decisions relating to your business, your business accounts and your professional role.

The key thing when making a professional LPA is to prepare an accompanying side letter, addressed to the attorneys of that LPA, to explain their appointment and give them all of the details they may need to carry out their role and ensure your professional affairs are suitably taken care of.

Further information

If you would like any further information or advice about the topic discussed in this blog, please contact Stephanie Mooney or our Private Client team.

 

About the author

Stephanie Mooney  is an Associate in the Private Client team.  Stephanie’s clients include high net worth individuals, entrepreneurs, executors, trustees and individuals who lack mental capacity.

 

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