What is a Lasting Power of Attorney for Property and Financial Affairs?
The Lasting Power of Attorney for Property and Financial Affairs covers decisions around your financial affairs, including your property. It also has the option to be used whilst you still have your mental capacity – which can be useful if you have mobility issues or are out of the country for long periods of time.
This Lasting Power of Attorney document (LPA) will allow your Attorney to:
- Manage your bank accounts, including paying bills and managing investments
- Buy or sell property
- Deal with payments related to your property – eg. Mortgage, rent, insurance, maintenance and other household expenses
- Collect income, pension and benefits
- Deal with your tax affairs
Within the LPA, you are able to set preferences that you would like to make your Attorneys aware of. These are non-legally binding wishes and can include things such as:
- “I would like to make a donation of £50 each year to Cancer Research.”
- “I would like to keep a minimum balance of £500 in my current account.”
It is also possible to set out instructions, which are legally binding and must be followed by your Attorneys. This can include things such as:
- “My Attorneys must consult my financial advisor on all transactions over £10,000.”
- “My Attorneys must not make any gifts.”
It is important to seek advice before including instructions in your LPA as they could become restrictive for your Attorneys if not written clearly.
If mental capacity is lost and you do not have your Property and Financial Affairs LPA in place, no-one automatically has the authority to act for you, not even your spouse or children. This could lead to your bank accounts being frozen, bills not being paid, rental properties being left empty, insurances lapsing and investments performing poorly. All of this adds to the stress for those left dealing with everything.
The consequences of not having your LPA for Property and Financial Affairs:
- If you have a joint bank account, the bank has the authority to remove access and freeze the account, even if you have your money in there
- It will not be possible to pay bills from your account
- Your bank accounts cannot be accessed or managed
- Benefits or pensions cannot be claimed on your behalf
- You will not be able to sell your property if you need to move into care
- If you have a mortgage and the deal expires, you will not be able to re-mortgage
- If you have rental properties, you will not be able to renew your rental agreements
- If you are a business owner, you business may not be able to continue with staff and suppliers not being paid. You can see our Business LPA article here: https://trustedlaw.co.uk/blog/business-lasting-power-of-attorney/
If mental capacity is lost and there is no LPA in place, a loved one can apply to the Court of Protection for Deputyship in order to make decisions on your behalf. This process often takes six months or more, is a very costly process and may not result in the Deputy having as much freedom to make decisions. It is, therefore, much more cheaper and effective to have an LPA in place instead.
If you have any questions or would like to discuss making your Lasting Power of Attorney for Property and Financial Affairs, please feel free to contact us on 01953 711950 or book an informal chat using our calendar link: https://calendly.com/tlaw-admin