This article was last updated on 1 May 2021.
Lots of people take time to make appropriate provisions for the cost of their care (and their inheritance) as early as possible. But a significant number still forget to ensure that their assets are in safe.
A Lasting Power of Attorney (LPA) is an important document for those who are concerned that they may not be able to make decisions for themselves in the years to come.
There are two types of LPA. In this article, we discuss Lasting Power of Attorney Property and Financial Affairs. We’ll explain why it’s important to have a Lasting Power of Attorney for Property and Financial Affairs in place, and how you can obtain one.
A Lasting Power of Attorney finance and property is a legal provision enabling you to protect your wishes and best interests should you lose mental capacity in the future so you are unable to make your own decisions. You can choose a someone else to make decisions for you in line with your personal wishes.
This ensures that people you know and trust are looking after you and your assets when you are unable to do so yourself. Without a Financial Power of Attorney you and your family will lack control over how you live and are cared for, as well as your losing access to your finances.
There are two types of Lasting Power of Attorneys – Lasting Power of Attorney for Health and Welfare, and Lasting Power of Attorney for Property and Financial Affairs, or as it is sometimes called a financial power of attorney.
Here is a short video explaining what one is.
A LPAs enable someone else to make decisions about your financial assets for you. The person may have the following responsibilities on behalf of the donor:
A Power of Attorney for Property involves a high level of responsibility for the donor’s assets.
For this reason, it’s important to ensure that you make a Lasting Power of Attorney for Property and Financial Affairs, but also that you choose someone you trust to act in your best interests.
Unlike a health and welfare attorney, this type of LPA does not only work once the donor’s unable to make their own decisions. Attorneys can act whenever the donor may need help making decisions after it is registered with the office for the public guardian.
A person with lasting powers of attorney for Property can manage your financial assets and has capacity to make decisions on your behalf when you do not have the mental capacity to make decisions yourself.
Without clear directions in place, by law your income and bank account can’t be accessed by anyone else. This means the attorneys cannot sell your house or other assets, manage your bills or pay for your care.
If you have set up a Health and Welfare Lasting Power of Attorney it is you need to make sure that the person with powers of attorney will be able to easily access the funds for your care. For this reason, it’s it is our advice that your should also appoint an attorney for Health and Welfare and a Lasting Power of Attorney for Property and Financial Affairs.
You don’t need to be elderly or infirm to set up a Lasting Power of Attorney for Property and Financial Affairs. Although it’s unpleasant to consider, it’s advisable for everyone to make appropriate provisions enabling loved ones to access their finances on their behalf should they unexpectedly lose mental capacity.
You can have a team of attorneys. However you need to think about how they will make a decision in partnership, and what will happen if they have different opinions on how to act or they cannot make a decision.
Before setting up a LPA Property and Financial affairs you’ll need to make a decision about who you want your nominated person to be.
Attorneys should be someone you trust to act in your best interests and take care of your assets – a family member or loved one. They should also feel comfortable with the responsibility you have asked them to take on, and they themself have mental capacity.
You can find forms online enabling you to set up a Property and Financial Affairs LPA. However, it’s advisable to contact a solicitor to oversee the process for you, as setting up an LPA for Property and Financial Affairs incorrectly could void it for future use.
You can choose which decisions the attorneys can make on your behalf.
It’s also worth noting that a Property and Financial Affairs LPA can come into play before you lose mental capacity – so it’s important to be clear about your directions and how and when you would like your attorneys to act for you.
There can be serious and upsetting consequences for the families of individuals who don’t set up a Property and Financial Affairs Lasting Power of Attorney.
Your family and loved ones won’t be able to access your money to pay for important things for you – for example your care provider, or even food.
Therefore you and your relatives lose complete control of your finances. You should also consider your spouse or partner when thinking of setting up a Property and Financial Affairs Lasting Power of Attorney.
Many people assume that upon death or loss of mental capacity spouses and long-term partners have an automatic right to access their money and act on their behalf – but this is rarely the case.
A Property and Financial Affairs Lasting Power of Attorney must be set up whilst you are still of sound mind, i.e. when you have capacity. For this reason it’s especially important to consider putting a Property and Financial Affairs Lasting Power of Attorney in place as early as possible to avoid running out of time.
It can be incredibly costly, frustrating and upsetting for family members in the future if you haven’t made appropriate arrangements for your finances.
You need to make a lasting power of attorney while you still have mental capacity. You must register the LPA with the office of the Public Guardian (OPG). You can register the arrangement yourself, or you can get an attorney to do it on your behalf.
You can either use the online service to register the LPA, or fill out sections 12-15 on the paper forms you used to make your LPA, and send it to the office of the public guardian.
Normally, you can expect it to take 8-10 weeks for the Office of the Public Guardian to register the donor’s power of attorney arrangement. However, the process will take longer if there were mistakes in your application.
Before your power of attorney can be registered, you need to notify all the people listed in the registration document ‘people to be notified’ section. This is on the document LP3.
If you don’t have a power of attorney and the person you want to act for is losing capacity, or has lost mental capacity, then you must go to the Court of Protection to get responsibility for decision making. You can read more about the court of protection process here.
This video explains what the Court of Protection is and how it works.
You can give attorneys whatever authority you please. For example, the donor may need the person to manage your investments for them, but do not want anyone else to be responsible for paying their bills for them or making any decisions about their bank account. If you want to apply for an LPA which only gives authority for some things, you need to make sure the legal document is drafted to deal with this. You might need to get professional help from solicitors so it is clear how much authority you want your attorneys to have.
You must have a power of attorney to sell the home of someone who may be ill and losing mental capacity. This is an important reason for making a power of attorney arranged, as it allows a nominated person the powers to deal with the sale of the home on your behalf.
Once an power is made, this does not mean it cannot be changed. Whoever made the LPA, the donor, can apply to cancel it as long as they have got the necessary mental capacity still. They can also nominate a replacement attorney to act for them. The attorney can also give up acting for the donor, and they must tell their decision to the donor, the other attorneys and the OPG.
You can work with solicitors or other professional services to get guidance when you make an LPA. An LPA is an important legal document, and solicitors will have considerable experience and used all the forms before, so getting help will improve the chances that your LPA is registered without errors. If there are errors that mean your LPA does not reflect your wishes, you may end up in court which is stressful and expensive.
Solicitors can be useful where the donor is unclear about the process, there is family dispute, or the assets are complicated and so legal experience is needed.
You are likely to end up paying around £500 if you make the decision to have a solicitor act on your behalf. You should check the forms yourself first to see if you are able to fill them out yourself without using solicitors. The local Citizens Advice team may be able to help.
Further guidance and information regarding a Power of Attorney for Property and Financial Affairs can be found here on the UK Care Guide website and on the gov.uk website.
Alternatively, you can get support from your local Age UK team or Citizen’s Advice Bureau.
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Jane is one of our primary content writers and specialises in elder care. She has a degree in English language and literature from Manchester University and has been writing and reviewing products for a number of years.
