For one reason or another, you may need to give power of attorney to your children early. Here are some factors you should know before making the decision.
Thinking ahead is always a smart idea – it’s a good way to prepare yourself for the events that are to come in the future as most of us are aware that we won’t always be able to carry on our duties. At some point, we, too, have to settle down and spend the remainder of our days differently. Of course, whatever work you have (making decisions, managing your finances) won’t get itself done; that is why you may have thought about passing on that responsibility to someone capable and trustworthy – your children.
Now that your kids have settled and are moving on with their life, you are ready to take the next step as a parent – getting yourself a power of attorney form and sitting down with your children to discuss the future of the family by deciding who should receive the lasting power of attorney from you.
What should you do or say during such an important meeting? Keep reading if you don’t want to miss out on any important details. After all, this is a crucial legal matter, and you want to make sure to do everything right to avoid any future complications.
What is a Lasting Power of Attorney?
A lasting power of attorney, also known as an LPA, is a legal document that authorizes someone to make personal, professional, or financial decisions on your behalf if you cannot do so on your own.
Before going any further, let’s look at some terms that will be used frequently by both your lawyers and me (throughout this article).
The first party is the ‘principle’ or ‘donor’. This term is used to refer to the original creator and owner of the lasting power of attorney. Second, there is the ‘attorney-in-fact’ or AIF. This term describes the person who receives the lasting power of attorney from the principal/donor.
What Are the Different Types of LPA?
According to English laws, there are mainly two types of LPA’s; One is usually given the task of handling property and financial affairs, while the other is assigned to deal with the health and welfare of the principal.
What Are The Responsibilities of your AIF?
When legally your child is given the lasting power of attorney, your child or attorney-in-fact will have the following responsibilities:
- They must act with your best interest in mind when making decisions on your behalf.
- They must abide by the legal guidelines set out for all receivers of the LPA.
- Although they are granted the authority, they must allow you to be involved in the decision where possible or where needed. They should not attempt to take the full control under any circumstances.
What Are The Limitations of an AIF?
Normally, as your attorney-in-fact, your child will have access to your bank accounts and other personal matters. They will be able to make transactions for you, sell a property and sign documents – but their authority is limited to a certain extent. They aren’t allowed to use the lasting power of attorney to tend to their personal needs.
There are exceptions, however. They can make transactions when donating to charities and can give gifts during special occasions like birthdays. The attorney-in-fact can also use the donor’s money to provide for their significant other or underage child.
Exceeding this limit violates the terms and conditions of lasting power of attorney and may result in their removal from the attorney-in-fact by the court.
Why Should You Give Your Child an LPA?
There are many reasons for deciding to give someone the right to make decisions in your stead.
In some unfortunate situations, some people cannot stop functioning or thinking normally after they cross a certain age. This happens because of many degenerative genetic conditions like Alzheimer’s disease or Huntington’s disease. As such, they must appoint their children to take care of both their financial and personal affairs.
In other cases, one might be too busy to manage all sectors. For example, they might be a very busy business owner. They might give an LPA to their child (which is normally the case with family businesses) to help reduce their workload. That way, if they cannot show up in the event of urgency, their attorney-in-fact can fill in for them.
You might be facing any of the problems stated above. When speaking to your family, make sure you layout your reasoning.
When Should You Talk to Your Children About it?
If you’re someone who is affected by degenerative diseases like the ones mentioned above, then you should probably sit down with your child/children who are of age as soon as you can (for you to be able to award your children a lasting power of attorney, they have to be eighteen years of age).
If you aren’t prone to get sick as time passes, it’s best not to rush. However, life can be pretty unpredictable, so if your initial plan was to appoint your child as your attorney-in-fact, then you might as well get it done, or at least have a thorough discussion about it with them.
Who Should I Give the LPA to?
It would help if you also tried to understand the mental capacity of your children. Are they capable enough to take on the responsibility? Will they understand everything that comes with being an AIF?
Part of the reason for sitting down with your kids and discussing the affair is because you need to know who is the most capable of shouldering the responsibility properly when you aren’t able to. It can get even more confusing because you can assign all of your children. You might feel that you need everyone to participate in this, but you never know who might end up misusing their rights, even if it wasn’t intentional. Therefore, choose very wisely.
Of course, all your children should be treated equally; but sometimes it’s best to let one or two of them deal with your issues.
To Conclude
Having such a discussion may be stressful and emotional, but it must be done to ensure a better future for both you and your kids. Getting it out of the way will only save you some time and trouble.
Once you’ve decided which of your kid(s) will be given the LPA, you should get the LPA registered as soon as possible. This is because the registration process usually takes months, and if you’re waiting for it to finish, then you’ll end up having to wait even longer before the LPA becomes effective.
