A Power of Attorney (PoA) is a crucial legal tool that allows individuals to grant someone else the authority to make decisions on their behalf. In England and Wales, a Lasting Power of Attorney (LPA) for Property and Financial Affairs plays a vital role in managing financial matters when a person is no longer able to do so due to illness, disability, or age-related decline.

What is a Power of Attorney for Property and Financial Affairs?

A Lasting Power of Attorney for Property and Financial Affairs is a legal document that enables you (the ‘donor’) to appoint one or more people (known as ‘attorneys’) to handle your financial and property matters. This could include paying bills, managing your bank accounts, selling property, or handling investments. Unlike the Health and Welfare LPA, which deals with medical and care decisions, this type of LPA is focused solely on financial and property matters.

Who Can Set Up a Power of Attorney?

Any individual over the age of 18 and with the mental capacity to understand the implications of the arrangement can set up a Lasting Power of Attorney. It is crucial that the person creating the LPA has the mental ability to make decisions at the time the document is made.

The person(s) you appoint as your attorney(s) should be people you trust entirely, as they will have significant control over your financial affairs.

Why Set Up a Power of Attorney for Property and Financial Affairs?

There are several reasons why setting up an LPA for Property and Financial Affairs can be beneficial:

1. Planning for the future: As we age or face unexpected health issues, it may become difficult to manage finances. An LPA ensures someone trusted can step in to manage things.

2. Avoiding court intervention: Without an LPA, if you lose capacity, your family might have to apply to the Court of Protection for the appointment of a deputy to manage your financial affairs, which can be a lengthy and expensive process.

3. Flexibility: This LPA can be used as soon as it is registered, with your consent, or only when you are no longer able to make decisions yourself.

4. Peace of mind: Knowing that your financial affairs will be handled by someone you trust can bring significant peace of mind, particularly for elderly individuals or those with degenerative illnesses.

What Powers Does an Attorney Have?

The scope of your attorney’s powers will depend on the preferences you outline in the LPA document. They may be authorised to:

- Manage your bank and building society accounts
- Pay your bills and expenses
- Sell your property (if necessary)
- Manage investments on your behalf
- Claim, receive, and use your income (such as pensions) and benefits
- Handle tax matters with HMRC

However, they must always act in your best interests and follow the legal guidelines set out in the Mental Capacity Act 2005.

Registering the LPA

For the LPA to be valid, it must be registered with the Office of the Public Guardian (OPG). You or your attorney can apply for registration, and it typically takes about 8 to 10 weeks for the process to be completed. Until the LPA is registered, your attorney will not have the legal authority to act on your behalf.

Can I Change or Cancel a Power of Attorney?

You can revoke or change an LPA at any time, provided you still have the mental capacity to do so. If you wish to make changes, this will often involve revoking the existing LPA and creating a new one, as LPAs cannot generally be amended once registered.

If you lose mental capacity, you will no longer be able to cancel the LPA without a court decision, making it crucial to appoint attorneys carefully.

What Happens if There’s No Power of Attorney in Place?

If no LPA is in place and you lose the capacity to manage your finances, your loved ones will have to apply to the Court of Protection for a deputyship. This process is not only time-consuming but also costly, and the appointed deputy might not be the person you would have chosen yourself.

How to Choose an Attorney

When choosing an attorney, you should consider the following:

- Trust: Choose someone you trust implicitly, as they will have control over your financial matters.

- Financial knowledge: It can be helpful to appoint someone who has a good understanding of financial management.

- Age and reliability: Choose someone who is likely to be able to carry out the role for as long as needed and who is reliable in managing responsibilities.

You can also appoint more than one attorney and specify how they should act—either jointly, where they must make decisions together, or jointly and severally, where they can act independently.

Conclusion

Setting up a Lasting Power of Attorney for Property and Financial Affairs is an essential part of safeguarding your financial future. It ensures that if you become unable to make decisions, your finances will be handled by someone you trust. With careful planning, you can ensure that your best interests are protected and that your financial affairs will be in capable hands.

If you are considering setting up an LPA, it’s important to seek legal advice to ensure it aligns with your wishes and provides the necessary protections for your future.