What is a Financial & Property Lasting Power of Attorney?
2 June 2021
What is the role of a Financial & Property affairs Lasting Power of Attorney?
A Property and Financial Power of Attorney, known as an LPA, or P&FLPA is an important document that allows your chosen attorneys to manage your financial affairs if you no longer want to, or if you are unable to manage them yourself.
This type of Lasting Power of Attorney authorises your chosen attorneys to do the following on your behalf:-
- run your bank and savings accounts;
- make or sell investments;
- pay your bills (care home, utilities etc.); and
- buy or sell your home.
When should I make a Lasting Power of Attorney?
There is a presumption that you only need to make an LPA later on in life; however, a Lasting Power of Attorney should ideally be made as soon as possible as, once it is in place, it can also be used in the following situations:-
- you are going on holiday or away travelling and want your attorneys to pay your bills and manage your financial affairs while you are away;
- you suffer an extended illness, are injured in an accident, or have to spend time in hospital and cannot physically go to the bank or shops.
If you leave it too late to make a Lasting Power of Attorney, and have already lost capacity by the time you or your loved ones address this (capacity being the ability to make and communicate your own decisions), you cannot make an LPA as you must have mental capacity to sign the document at the time you make it.
If you lose mental capacity before making a Lasting Power of Attorney, your family or friends would need to apply to the Court of Protection for a Deputyship Order which can take up to a year to complete. Deputyship Orders are also far more costly than creating an LPA.
People often worry that, once their LPA has been registered, they will lose control of their finances – even if they have capacity. They fear that their attorneys could possibly take over. This is not the case. Whilst you have mental capacity, your attorneys can only act with your consent and under your supervision.
Should I use a solicitor to draft my Lasting Power of Attorney?
A solicitor will have the legal expertise and experience to explain each section of the LPA to you in simple terms.
A solicitor will be aware of important considerations which you might not think are relevant. For example, if you have certain assets such as a Stocks & Shares portfolio which is being managed by your stockbroker, certain wording needs to be included in the Property and Financial Lasting Power of Attorney document to allow your Attorneys to manage it for you.
A solicitor would ensure that the document is registered without errors. This is very important as errors on the document cause complications if they become apparent after the LPA has been registered because they cannot be retrospectively corrected. A new Lasting Power of Attorney would need to be created without those errors in it and if you have lost capacity by then, you would not be able to make a new LPA.
A specialist Wills and Probate Solicitor is able to provide you with relevant guidance to ensure that you fully understand any issues which could arise e.g. dealing with family disputes or complicated assets.
If you would like to enquire about making either a Property and Financial Lasting Power of Attorney, or a Health and Welfare Power of Attorney (which grants your chosen attorneys the ability to make decisions regarding your daily care, medical treatment and ongoing medical care) contact one of our specialist team today. Find our nearest high street office by clicking here or call 03330 144 455 today.
This article was written for Redkite Solicitors by Wills & Probate Trainee Solicitor Alice Powell. To find out more about Alice visit her website profile by clicking here.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.