Lasting Power of Attorney for Property and Financial Affairs
Setting up a Property and Financial Affairs Lasting Power of Attorney (LPA) (sometimes referred to as a finance power of attorney) allows someone you trust to manage your property and finances on your behalf should the need arise. This could be in the long term or until such time that you are able to take the reins again yourself.
Accessing someone’s finances if they become incapacitated or ill is a complex and protracted process, which can make things very difficult for a spouse, partner or children who need to pay bills or access cash on their behalf.
The person who makes the LPA is known as the donor and the person to whom the decision-making power is given is known as the attorney.
Property and Financial Affairs LPA
A Property and Financial Affairs LPA allows your appointed attorney(s) to deal with and make decisions about things such as:
- Buying or selling property or investments
- Bank, building society and other financial accounts
- Welfare benefits or tax credits
- Tax affairs
Your attorney can be given the power to deal with all of your property and financial affairs or you could specify that they only have the power to deal with certain things, such as buying or selling property or managing certain finances. Your LPA needs to be very specific on what the attorney is and isn’t allowed to do.
Unless you stipulate otherwise, a Property and Financial Affairs LPA will come into effect as soon as it is registered. You do not have to wait for someone to lose their mental capacity before using it. The attorney can start making decisions even if the donor is still able to do so themselves.
An attorney may, for example, use money from the donor bank account to look after the donor’s house, or to buy food or other appropriate possessions.
Unless you already own a property or a joint bank account together, the donor’s finances must be kept completely separately from those of the attorney.
You will have to show a bank or building society the registered LPA before you can gain access to the donor’s accounts in order to manage them.
Buying and selling property
A power of attorney will be necessary to sell the house of someone who is losing capacity. It is therefore worth appointing an attorney to take responsibility for the sale of any property.
You will need to seek legal advice if a property is to be sold below market-value, if you’re giving the property to someone else or if you as attorney want to buy the property yourself.
With Just Wills & Legal Services, setting up an LPA is a straightforward process. Whether in your own home or via video our team of expert consultants can help you prepare your affairs exactly as you wish, protecting you and your family.
If you would like further details or would like to arrange an appointment in person or online, please contact us
Gifts and Donations
As an attorney, you can spend money on:
- Gifts to a donor’s friend, family member of acquaintance, for example on birthdays or graduations
- Donations to a charity that you know the donor would agree to, for example if they’ve donated before or if it is a cause close to their heart
For all other types of gifts and donations, you will have to apply to the Court of Protection for permission.
- Paying school or university fees
- Tenants living in the donor’s property for less than market-rate rent
it does not matter if the donor has given these types of gifts and donations before, you must still apply to the Court of Protection.
Who should I choose to be my Property and Financial Affairs LPA attorney?
Most commonly, attorneys are partners, family members or friends, although you can choose anyone to be your attorney, provided they are over the age of 18.
Your attorney should be someone you know and trust and who you believe will act in accordance with your wishes and preferences. It is also important to remember that your attorney may have to make difficult decisions on your behalf so they should be someone who understands your values.
Can I have more than one attorney?
Yes, there is no limit to the number of attorneys you can have. Sometimes having more than one attorney is helpful because it shares the burden of difficult decisions among a group of people, rather than everything falling on the shoulders of one person. You can also nominate replacement attorneys to step in if any of your attorneys die. We recommend, for practical purposes, no more than four attorneys.
If you have more than one attorney, they can act in the following ways:
- Jointly – all attorneys must make all decisions together. This means that if a medical decision needed to be made but only one attorney was contactable at the time, said attorney would not be allowed to make the decision on his or her own. If one attorney dies, the LPA becomes invalid and the remaining attorney(s) will no longer be able to make decisions.
- Jointly and severally – acting jointly and severally means that your attorneys can act together or on their own. If only one attorney is available, e.g. because the other attorney(s) are otherwise engaged, they can make a decision on their own. Moreover, if one attorney dies, the others are still able to make decisions.
- Jointly for some decisions and jointly and severally for other decisions – for this method to work you must specify what type of decisions must be taken jointly and which can be taken severally. If you have not stipulated, the attorneys will act jointly.
Who do I need to notify when I make a Property and Financial Affairs LPA?
You are not obliged to notify anyone that you are making an LPA. However, you have the option to notify up to five people. These people will be sent a letter and will have three weeks to raise any objections.
Advantages of an LPA
If you haven’t set up an LPA, your loved ones could end up having to make difficult decisions or pay out a lot of money on your behalf. The Court of Protection would have to appoint a deputy to manage your affairs, which can be both time-consuming and costly.
An LPA will avoid the distress of a delay and also preserve your assets to pay for the care you may need in the future.
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