Divorce leads to big changes on a number of fronts. It will involve a complete rearrangement of your financial and personal affairs. Changing bank accounts and making provision for new child arrangements are obvious examples of what needs to be done in the immediate aftermath of divorce. Other tasks might be less obvious, but just as crucial. Previously we’ve looked at the importance of updating your will after dissolution of your marriage. Here we look at Lasting Powers of Attorney (LPAs). If you already have one, should you change it? And if you don’t have one, should you consider drawing one up?
Background: What Is A Lasting Power if Attorney?
A Lasting Power of Attorney (LPA) is a formal legal instrument under which an individual (the ‘donor’) gives someone else (the ‘Attorney’) the power to make key decisions about them in the event that they lose the mental capacity to take these decisions for themselves. The Mental Capacity Act, 2005 created two types of LPA:
- Property and Financial Affairs LPA which replaced the existing ‘Enduring’ Power of Attorney enabling an attorney to operate your bank accounts and manage your finances generally; and
- Health and Welfare LPA – a new kind of power of attorney which among other things empowers your attorney to decide where you live and what kind of medical treatment your receive
It’s up to you to decide whether you wish to have both types of LPA or just one. And while legal advice is not essential, you should bear in mind that LPAs have significant legal implications. Legal guidance from an experienced solicitor can ensure that you:
- Fully understand the nature of LPAs
- Tailor your LPAs to your own circumstances, restricting the power of your attorney where you think appropriate
- Choose suitable attorneys
- Consider whether you need to appoint replacement attorneys. These individuals can step in if your original choice decides that he or she does not want to take on the responsibility of acting
- Decide whether, if you have more than one attorney, they can act on there own or whether they have to take decisions about you jointly
What Happens If I Don’t Have An LPA?
LPAs are only relevant if you become unable to make decisions about finances and welfare on your own. If you do become mentally incapable and you don’t have an LPA in place then your family or next of kin will have to apply to the Court of Protection when they wish to make any decisions in your behalf. While appropriate in some circumstances the Court of Protection process can be cumbersome, time consuming and expensive.
What Effect Will Divorce Have On My LPA?
Usually if your spouse has been appointed as your attorney under an LPA the appointment will end if you divorce. However you can specify in your LPA that you wish your spouse to continue to act even in the event that your marriage breaks down.
If we assume that there is no clause allowing your ex to remain as your attorney following divorce and his or her appointment terminates, does this mean you need to execute an entirely new LPA? There are a number of scenarios to consider:
- If your ex spouse was the only attorney appointed and there’s no clause extending his or her power in the event of divorce then the LPA will lapse and you will have to create new LPA.
- If you appointed more than one attorney, including your ex the question of whether the LPA will still be effective after your divorce depends on whether you appointed the attorneys to act ‘jointly’ of ‘jointly and severally’. If your attorneys were instructed to act jointly the LPA will lapse because under its terms the remaining attorney cannot take decisions without your ex’s agreement. If however you appointed your attorneys to act jointly and severally the LPA will remain effective as the remaining attorneys are able to act in the absence of your ex.
- If you appointed replacement attorneys the LPA will still be operative with the replacements simply being substituted to act in place of your ex.
LPAs are extremely useful legal instruments. But the process of executing and registering LPAs is complex. Indeed in 2021 the government announced a consultation on simplifying the way LPAs are created and streamlining the process of registering and administering them.
As we’ve seen events like divorce can render existing LPAs ineffective. The cost of creating LPAs is not insignificant so it’s worth taking legal advice beforehand to ensure you consider all eventualities.
If you would like advice on any aspect of your divorce and the issues we’ve raised please call Brookman Solicitors on 44 (0) 20 7430 8470 or contact us online. We offer a free, initial consultation.