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 hands should they lose mental capacity in the future.
A Lasting Power of Attorney is essential for those who are concerned that they may not be able to make decisions for themselves in years to come.
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 is a legal provision enabling you to protect your wishes and best interests should you lose mental capacity in the future. A person (or people) nominated by you takes care of your 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 Attorney – 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 Lasting Power of Attorney for Property and Financial Affairs enables your nominated person to take care of your financial assets for you. Responsibilities include:
A Power of Attorney for Property involves a high level of responsibility.
For this reason, it’s crucial to ensure that you have put a Lasting Power of Attorney for Property and Financial Affairs in place, but also that you appoint someone you trust to act in your best interests.
A Power of Attorney for Property enables your trusted person to manage your financial assets on your behalf when you are not able to do so yourself.
Without clear directions in place legally your money cannot be accessed by anyone else. This means you cannot sell your house or other assets, pay bills or pay for your care.
If you have set up a Health and Welfare Lasting Power of Attorney it is important to consider how your nominated person will easily access the funds for your care. For this reason, it’s advisable to 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 should they unexpectedly lose mental capacity.
Before setting up a LPA Property and Financial affairs you’ll need to choose your nominated person.
This must be someone you trust to act in your best interests and take care of your assets – a family member or friend. They should also feel comfortable with the responsibility you have asked them to take on.
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 your LPA for Property and Financial Affairs covers. For example, there may be certain things you’d rather were left, whereas others are more important to you.
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 nominated person 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 – such as 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 – 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. 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.
If you don’t have a power of attorney and the person you want this for is losing, or has lost mental capacity, then you will need to 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 need a power of attorney for selling property. Without this, you are unable to sell the home of someone who may be ill and losing mental capacity. This is one of the key reasons as to why it is worth getting a power of attorney arranged as it allows a nominated person to take the responsibility for the sale of the property under the power of attorney.
Further 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.
This content was first published by Susan Glenholme, the Managing Partner for Debenhams Ottoway.
As well as being a managing partner and head of the private wealth team, Susan is recognised by Chambers and Partners UK legal directory, features in the legal 500, as one of the leading private client lawyers in the UK.