A Will protects your family after you die. It does nothing at all while you’re still alive but unable to make decisions.
Most people who come to us for a Will have already thought carefully about who gets what when they die. Far fewer have thought about what happens if they have a stroke, an accident, or a diagnosis like dementia and simply can’t manage their own affairs anymore – even for a few weeks. That gap is where a Lasting Power of Attorney (LPA) comes in, and it’s why we tell every client the same thing: a Will is only half the plan.
There are two types of LPA, and they do very different jobs.
Property and financial affairs LPA
This covers your bank accounts, mortgage, investments, pension income, tax affairs, and – critically for many of our clients – your business. It can be used as soon as it’s registered, even while you still have full mental capacity, which makes it useful for practical reasons too (a spouse in hospital, or an attorney handling things while you’re travelling), not just for a loss-of-capacity emergency.
Health and welfare LPA
This covers decisions about your daily care, where you live, and medical treatment. Unlike the financial LPA, it can only be used once you’ve lost the mental capacity to make those decisions yourself. You can also give your attorneys the authority to make life-sustaining treatment decisions on your behalf, if you choose to.
What happens if you don’t have one
If you lose capacity without an LPA in place, nobody – not your spouse, not your adult children, not your business partner – automatically has the legal right to step in and manage your affairs. Instead, someone has to apply to the Court of Protection to be appointed as your deputy. This is the process the LPA is specifically designed to avoid, and it is slower, more expensive, and far more restrictive than most families expect.
A property and financial affairs deputyship typically involves a Court application fee, an OPG assessment fee, and often a security bond, on top of any solicitor’s fees for preparing the application. All told, families are commonly looking at several thousand pounds once legal costs are included, and the process usually takes a number of months from application to a deputy being formally appointed – all while bills still need paying and, for a business owner, decisions still need making.
A deputy also doesn’t have the same freedom an attorney has. Deputies are supervised by the Court of Protection on an ongoing basis, have to report on how they’ve managed the person’s money every year, and often need specific Court permission for one-off decisions an attorney could simply make. It is workable, but it is a poor substitute for choosing your own attorney in advance.
Why banks freeze accounts – and why this hits business owners hardest
Banks have a legal and regulatory duty to protect customers who may lack capacity to manage their own money. If a bank becomes aware – through a branch visit, a family member’s call, or simply unusual account activity – that an account holder may have lost capacity, standard practice is to restrict or freeze the account until someone with proper legal authority (an attorney under a registered LPA, or a court-appointed deputy) comes forward. Without that authority, nobody can be let in, no matter how well-intentioned or how close a relative they are.
For a business owner, this isn’t a personal inconvenience – it’s an operational crisis. If you’re the sole signatory on a business bank account and you lose capacity, the account can be frozen. Suppliers don’t get paid. Payroll doesn’t run. Nobody can access company funds to keep the lights on, and your co-directors or employees are left in an impossible position while a deputyship application slowly works its way through the Court. We regularly meet directors and sole traders who assume their business partner or spouse could simply take over if something happened to them. Without a business LPA, or specific attorney provisions covering company accounts, that isn’t true.
If you run a limited company, it’s worth discussing with us whether your LPA needs to specifically address company bank accounts and shareholdings, separately from your personal finances, since the two are treated differently and one document doesn’t automatically solve both problems.
Registration timescales with the Office of the Public Guardian
An LPA has no legal effect until it has been registered with the Office of the Public Guardian (OPG), and registration is not instant. There is a mandatory statutory waiting period after an application is submitted to allow named people to raise an objection, and on top of that the OPG has to process the paperwork itself. In practice, most applications are currently taking a good number of weeks from submission to a registered LPA landing back on your doormat – and it can run considerably longer if there’s any error on the form, since the whole application is typically returned to be corrected and resubmitted rather than being fixed in-flight.
This is the single biggest reason we tell clients not to leave LPAs until they think they’ll need them. An LPA registered while you’re perfectly well and simply being sensible costs you nothing but a bit of admin. An LPA rushed through after a diagnosis or a health scare – assuming you still have the mental capacity at that point to make one at all, which is not guaranteed – can mean weeks or months of exposure while the application sits in the OPG’s queue, with the Court of Protection as the only fallback if capacity is lost before registration completes.
Choosing your attorneys
This is a decision worth taking seriously, not just a form-filling exercise. Your attorney needs to be someone you trust completely, who is willing and organised enough to deal with paperwork and financial administration, and who is likely to be available and capable when the time comes – which is one reason many people choose someone younger, or appoint more than one attorney.
Some practical points we cover with clients:
- You can appoint more than one attorney, and decide whether they must act jointly (agreeing on everything) or jointly and severally (able to act independently) – each has trade-offs between safety and practicality.
- You can appoint replacement attorneys in case your first choice can no longer act.
- Business owners often benefit from separating personal attorneys from business attorneys, so a spouse handles the house and savings while a business partner or fellow director handles the company.
- You can leave written guidance for your attorneys on how you’d like decisions made, without it being legally binding in the way the LPA itself is.
How this differs from an old Enduring Power of Attorney
If you made a Power of Attorney before October 2007, you may have an Enduring Power of Attorney (EPA) rather than an LPA. EPAs made and signed correctly before that date remain valid, but they only ever covered property and financial affairs – there was never an EPA equivalent for health and welfare decisions, so anyone relying solely on an old EPA has no legal cover at all for care or medical decisions.
An EPA also works differently once capacity is lost: it must be registered with the OPG as soon as the attorney believes the donor is losing capacity, rather than being registered proactively while everything is straightforward, as we’d generally recommend doing with a modern LPA. If you’re not certain whether a document you hold is an EPA or an LPA, or whether it was ever validly signed, it’s worth having it checked rather than assuming it will do the job when you need it.
The bottom line
A Will answers the question, what happens to my estate when I die? An LPA answers a completely different and, for many people, more immediate question: who looks after me and my affairs if I can’t do it myself? Business owners and property investors in particular have more to lose from getting this wrong, because frozen accounts and stalled decisions have knock-on costs that a straightforward personal estate doesn’t carry. Neither document does the other’s job, and neither is complete without the other.
If you have a Will but no LPA – or an old EPA you’re not sure still covers what you need – book a discovery call with The Legacy Wills Company. We’ll talk through your situation, your business (if you have one), and what a properly structured pair of Lasting Powers of Attorney should look like for you.