III. Property & Financial Affairs LPAs

What Kinds of Decision Do They Cover?

A Property & Financial Affairs Lasting Power of Attorney (LPA) grants your chosen attorney the legal authority to manage your finances and property on your behalf. This is a very broad power, and it can be used for a wide range of decisions, including:

• Managing bank accounts: This includes withdrawing money, paying bills, and making investments.

• Buying and selling property: Your attorney can sell your home or other properties you own, and can also buy property on your behalf.

• Dealing with investments: They can manage stocks, shares, and other financial investments.

• Paying for your care: This includes paying for care home fees or other care-related costs.

• Claiming benefits and pensions: They can apply for and receive state benefits or private pensions on your behalf.

• Paying for your daily needs: This can be anything from paying for your groceries to buying a car.

Why Might I Need One?

Nobody knows what the future holds. An LPA is a crucial legal tool that allows you to plan for a time when you might be unable to make your own decisions. This could be due to:

• Physical or mental illness: Conditions like dementia, stroke, or a serious accident can leave you without the mental capacity to manage your own affairs.

• Physical disability: You may be physically unable to get to the bank or deal with financial paperwork.

• Traveling or living abroad: If you are out of the country for an extended period, you might need someone to manage your finances at home.

Without an LPA in place, your loved ones would have to apply to the Court of Protection to be appointed as a deputy. This is a lengthy, expensive, and stressful process that can cause significant delays in managing your finances, potentially leading to serious problems like unpaid bills or mortgage arrears.

When Can My Attorney Act?

The Property and Financial Affairs LPA is unique because your attorney's power can be used as soon as the LPA is registered with the Office of the Public Guardian—with your permission—not just when you lose mental capacity. This is an important distinction from the Health & Welfare LPA, which only takes effect if you've lost the capacity to make your own health decisions.

This means your attorney can act on your behalf even if you still have the mental capacity to make decisions for yourself. For example, you might want your attorney to deal with your finances while you're on a long holiday. The LPA can also be used if you become physically unable to manage your own affairs but still have mental capacity.

Restrictions and Controls

The power you give to your attorney is significant, and you may want to set certain boundaries. You can do this by including specific instructions and preferences in your LPA document.

• Instructions: These are legally binding rules that your attorney must follow. For example, you can stipulate that they cannot sell a particular property or that they can only invest in certain types of low-risk funds.

• Preferences: These are non-binding wishes that your attorney should consider when making decisions. For example, you could state that you'd prefer to keep a certain bank account open or that you'd like your attorney to prioritize certain charities for donations.

The LPA also includes statutory safeguards to protect you. All attorneys must act in your best interests and follow the principles of the Mental Capacity Act 2005, which includes making decisions that are as least restrictive as possible. The Office of the Public Guardian also has the power to investigate and take action if there are concerns about how an attorney is acting.

Real Life Scenario 1: John and Sarah

Imagine John, a 40-year-old, married to Sarah. He believes he has covered any problems which might arise by ensuring his bank accounts and house are in joint names. He thinks this means Sarah won't be affected if anything happens to him.

However, John has a sudden car accident which leaves him in a coma. Without an LPA, Sarah has no legal authority to access their joint bank accounts to pay the mortgage or bills, or to sell or remortgage the house, if necessary. To be able to do so she must apply to the Court of Protection, which can be both lengthy and stressful. This can lead to serious financial issues for her at a time when she should be focused on his recovery.

However, if he had made a Property & Financial Affairs LPA and appointed Sarah as his attorney, she could immediately have used the banks accounts and managed his finances . She also would have had no great problems in selling or remortgaging the house.

Real Life Scenario 2: Maria and David

Another common scenario is an extended trip abroad.

Consider a retired couple, Maria and David, who spend six months travelling. If they have a Property & Financial Affairs LPA in place, their attorney can handle unexpected events at their home in the UK, like a burst pipe or an issue with a tenant.

Without an LPA in place, such emergencies might require them to return home or, at a minimum, deal with the stress of trying to manage the situation from a different time zone.

An LPA gives you the freedom to live your life knowing your financial and property matters are in safe hands, even if you are not around to manage them yourself.

Next: The other kind of LPA is the Health & Wellbeing LPA. To find out more about this, click here.

Lasting Powers of Attorney – A Simple Guide

III. Property & Financial Affairs LPAs