Attorneys under this type of LPA can deal with financial matters and property if you abide by the legal requirements and guidelines.
Let’s start with some of the terms that can make Lasting Powers of Attorney so confusing:
Donor = the person who wishes decisions to be made on their behalf. Their name is on the front page of their LPA. If you’ve made an LPA, the donor is you.
Attorney = the person or people that the donor has chosen to make decisions for them. Attorneys sign the LPA at the time it is made. Despite the word’s association with American law, attorneys don’t have to be legal professionals. Indeed they are usually family and friends.
Mental capacity = the ability to make a specific decision at the time that it needs to be made.
The first thing to consider is whether or not the donor still has mental capacity:
- If they don’t have mental capacity, you can act on their behalf using the property and financial affairs LPA.
- If they do have mental capacity, whether or not you can act depends on how the LPA is set up.
To find out, look at page 6 of the LPA. There is a section entitled “When do you want your attorneys to be able to make decisions?”
The first box says, “As soon as my LPA has been registered (and also when I don’t have mental capacity).” If this box has been ticked, you can use the LPA straight away, even if the donor still has mental capacity, as long as they want you to.
If the box is not ticked, you can only use it if the donor has lost mental capacity.
Note that this is different from the way the LPA for health and welfare works. The LPA for health and welfare can only be used once the donor has lost mental capacity.
What can you do with an LPA for property and financial affairs?
The starting point is that you must act honestly and in the donor’s best interests. You have to help the donor make decisions if possible. Even if you think a decision is odd or unwise, you can’t decide for them.
As an attorney, you must help the donor to reach their own decisions, if they can. The LPA for property and financial affairs covers the following:
- using their bank/building society current and other savings
- claiming, and using their benefits, pensions and allowances
- paying for electricity, water and care and other bills
- buying or selling their home
- saving or making and selling investments
How do you use an LPA for property and financial affairs?
If you’re dealing with money you will be dealing with banks, building societies and other organisations. But all of these need to recognise you as an attorney.
That means you’ll have to set up the LPA in the first instance. Every bank will have its own process but typically it involves posting the LPA for property and financial affairs, or a certified copy, to them, along with ID documents to prove your identity.
If there is still a local branch, you may be able to take the original in and have them make a copy on the spot. That way, there’s less danger or the original being post on the post.
Alternatively, the Office of the Public Guardian (which registers LPAs), now allows you to create a digital code. You can share this online with banks and other organisations, although they’ll still need to confirm your ID.
Can you claim expenses for acting as an attorney under an LPA for property and financial affairs?
Clearly, doing some of these things will incur cost to you. You are allowed to claim expenses to act as an attorney, such as buying stamps or paying for phone calls, but you’re not allowed to charge for your time.
As far as expenses goes, there’s detailed guidance on the Government website. In summary, you have to keep a record of expenses and submit it to the person looking after the donor’s accounts (if that’s not you).
What should you do first?
It’s a good idea to first locate all the necessary paperwork, such as benefits and pension letters, and statements for bank accounts and credit cards. Then, talk to the donor. Ask them about their preferences, including:
- who they want to give birthday gifts to, and how much.
- what they want to spend on clothes and other items
- preferences for donating to charities
- if they want to rent out their home if they have to move into care
There’s a comprehensive guide to using an LPA for property and financial affairs on the Gov.uk website.
How do you make an LPA?
To find out how to make a LPA, read this article. There’s more on our LPA services here. To receive a free callback to discuss setting up an appointment, click the button below.