Planning for a time when you may be unable to manage your own finances can feel uncomfortable. However, putting the right arrangements in place now can protect you, reduce uncertainty and make life considerably easier for the people supporting you.
A Property and Financial Affairs Lasting Power of Attorney, commonly known as an LPA, allows you to appoint people you trust to help manage your money and property or make financial decisions on your behalf.
What Is a Property and Financial Affairs LPA?
A Property and Financial Affairs LPA is a legal document through which you appoint one or more people, known as attorneys, to make decisions about your finances.
Depending on the authority and instructions included in the document, your attorneys may be able to deal with matters such as:
• Managing bank and building society accounts
• Paying household bills
• Collecting benefits or a pension
• Managing savings and investments
• Completing tax matters
• Buying or selling property
• Paying for care and other essential services
A financial LPA must be registered with the Office of the Public Guardian before it can be used.
How Is It Different From a Health and Welfare LPA?
There are two separate types of Lasting Power of Attorney:
Property and Financial Affairs LPA
This covers decisions involving your money, bills, benefits, investments and property.
Health and Welfare LPA
This covers decisions involving your care, medical treatment, daily routine and where you live.
You can make either type or put both in place. Having one does not give your attorneys authority over matters covered by the other.
Your Family Cannot Automatically Manage Your Finances
Many people assume that their husband, wife, partner or adult children will automatically be able to access their money and manage their affairs if something happens to them.
However, being described as someone’s “next of kin” does not provide automatic legal authority over their bank accounts, investments or property.
Without a valid LPA or another recognised form of authority, financial organisations may refuse to discuss the person’s affairs or allow relatives to manage their accounts.
Why Might You Need Someone to Act for You?
Mental capacity can be affected by many circumstances, including:
• Dementia
• A stroke
• A brain injury
• A serious accident
• A sudden illness
• A long-term condition
• Periods of unconsciousness or severe confusion
An LPA is not only relevant to older people. An unexpected accident or illness could affect anyone’s ability to manage their finances temporarily or permanently.
Can an LPA Be Used While You Still Have Capacity?
A registered Property and Financial Affairs LPA may be used while you still have mental capacity if:
• The document permits it; and
• You have given your attorney permission to act.
This can be helpful if you are physically unwell, have difficulty getting to the bank, are spending time in hospital or simply want support managing complicated financial matters. You continue to make your own decisions wherever you are able to do so.
What Happens If You Lose Capacity Without an LPA?
If you become unable to manage your financial affairs and no LPA is in place, a relative may need to apply to the Court of Protection to become your deputy.
Deputyship can involve:
• A formal court application
• Application and possible hearing fees
• Providing detailed financial information
• Ongoing supervision
• Annual reporting requirements
• Delays before someone is authorised to act
The court will decide who is appointed and what powers they receive. This may not be the person you would have chosen yourself.
Creating an LPA allows you to make that choice while you still have capacity.
The Benefits of Having a Financial LPA
Protection Against Unexpected Events
If an accident or illness prevents you from managing your affairs, your chosen attorneys can step in without your family having to begin a new court application.
More Control Over Your Future
You choose your attorneys and can include instructions and preferences explaining how you would like certain matters to be handled.
Bills and Care Fees Can Still Be Paid
Your attorney may be able to manage essential payments such as household bills, mortgage or rent, insurance, care costs and other financial commitments.
Less Uncertainty for Your Family
Clear authority can help prevent confusion about who should deal with your finances.
Support Before Capacity Is Lost
Where the LPA permits it, your attorney can help with financial tasks while you still have capacity and with your permission.
Who Should You Choose as Your Attorney?
Your attorney must be aged 18 or over. Someone who is bankrupt or subject to a Debt Relief Order cannot act as an attorney under a Property and Financial Affairs LPA.
Choose someone who is:
• Trustworthy and financially responsible
• Willing to take on the role
• Able to keep accurate records
• Comfortable dealing with banks and organisations
• Likely to act calmly during difficult situations
• Willing to follow your instructions and act in your best interests
You can appoint more than one attorney and decide whether they should make all decisions together or whether they can sometimes act separately.
It can also be sensible to appoint replacement attorneys in case one of your original choices later becomes unable or unwilling to act.
What Responsibilities Does an Attorney Have?
An attorney cannot simply do whatever they choose with your money.
They must:
• Follow the Mental Capacity Act
• Act in your best interests
• Consider your wishes and preferences
• Keep your money separate from their own
• Keep appropriate accounts and records
• Avoid conflicts of interest
• Stay within the powers granted by the LPA
There are also restrictions on gifts, property transactions and other significant financial decisions. In some situations, authority from the Court of Protection may be needed.
How Do You Set Up an LPA?
The main stages are:
1. Choose your attorney or attorneys
2. Decide how they will make decisions
3. Consider appointing replacement attorneys
4. Record any instructions and preferences
5. Complete the correct Property and Financial Affairs form
6. Ask a certificate provider to confirm that you understand the document and are making it freely
7. Arrange the signatures in the correct order
8. Apply to register the LPA with the Office of the Public Guardian
The certificate provider is not automatically carrying out a formal medical capacity assessment. Their role is to confirm that you understand the LPA, that you are making it by choice and that there is no obvious reason it should not be created.
Why Consider Professional Guidance?
It is possible to make an LPA yourself using the official online service or paper forms. Professional advice is not compulsory.
However, guidance can be valuable when:
• You have complicated assets or family arrangements
• You are unsure whom to appoint
• You want different attorneys to manage different decisions
• You need carefully written instructions or preferences
• There may be questions about mental capacity
• You want to reduce the risk of errors or rejection
• You want the arrangements to continue if an attorney can no longer act
Getting the details right at the beginning can prevent delays and difficulties later.
Don’t Leave It Until It Is Too Late
You can only create an LPA while you have the mental capacity to understand what you are signing and the authority you are granting.
Once capacity has been lost, your family cannot create an LPA on your behalf. They may instead need to consider a Court of Protection application.
Putting an LPA in place is not about giving up control. It is about choosing who you trust and making sure the right people can protect your interests should you ever need their help.
Get Help Setting Up Your LPA
Safeguarding Futures can explain your options, help you choose arrangements suited to your circumstances and guide you through the process from preparation to registration.
This article provides general information rather than personalised legal advice. Lasting Powers of Attorney described here apply in England and Wales; different arrangements apply in Scotland and Northern Ireland.
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