Following on from our last article regarding Health and Welfare Lasting Power of Attorney, this week we are going to be looking at the LPA for Property and Financial Affairs and some of the most frequently asked questions regarding this type of LPA.
What is a Lasting Power of Attorney?
A Power of Attorney allows you to appoint someone else to act on your behalf. The person making the power of attorney is called a donor and the person appointed to act on their behalf is called an attorney.
There are two types of LPA:
- Property and Financial Affairs LPA
- Health and Welfare LPA
What is a Lasting Power of Attorney for Property and Financial Affairs?
A Property and Financial Affairs LPA allows the attorney to make decisions that relate to the donor’s property and financial affairs, such as paying bills, collecting income or benefits. In some cases, the attorney can be responsible for selling the donor’s house, but this will be subject to certain conditions.
You can choose whether the LPA can be used as soon as it is registered or only if in the future you are unable to make such decisions yourself. For example, if you are out of the country or physically incapacitated. You will need to register the LPA with the Office of the Public Guardian. If you are the donor and you still have mental capacity, you can apply to register the LPA yourself.
What can a Property and Finance LPA authorise an attorney to handle?
- Buying, selling and renting your property
- Renovation or repairing your property, if required
- Managing your bank accounts
- Managing your investments
- Paying your household bills
- Paying any outsource bills/fees
- Receiving income, inheritance, or other entitlement on behalf of the Donor
- Investing donor’s savings
- Claiming all benefits, pensions, allowances, and rebates.
You can restrict the types of decisions your attorney can make or let them make all decisions on your behalf. However, you are only allowed to make an LPA whilst you are still capable of making decisions for yourself. This is called having mental capacity.
It is a common assumption that if something happens to you in the future and you are unable to make your own decisions about issues such as finances, property, healthcare, or personal care, for example, that your family or friends can simply take over. Unfortunately, this is not the case. In those circumstances, a family member or loved one would have to apply to the Court of Protection to be appointed as your “Deputy”. That process is involved, expensive, intrusive, and lengthy.
How do I set up an LPA for property and finances?
Before you even set up an LPA for your property and finances you will need to make a decision about who you want to be your nominated attorney or attorneys. You should nominate someone you trust, who will act in your best interests and will take care of your assets the best way they can. You need to ensure you feel comfortable with the person and the responsibility you have asked them to take on, and the attorney themselves has the mental capacity to deal with these decisions.
There are various processes and factors that should be considered when drafting and registering a Lasting Power of Attorney for Property and Finances, and it is advisable to seek the advice of an expert who can help you and your family assess the most appropriate solution depending on your circumstances.
Specialist Legal Advice
These documents must be well-drafted to be effective and the rules regarding the applications can be complicated. At Parker Arrenberg, we can offer you expert and cost effective legal advice on all matters concerning Lasting Powers of Attorney. We can also provide legal advice and guidance on the Court of Protection and have the knowledge and expertise to provide expert advice on the Mental Capacity Act 2005. We can advise on all stages of the assessment process, make applications to the Court of Protection or provide guidance on the appropriate solution should disputes arise.