When you’re considering the future, it’s important to fully understand your options. For example, even though you may have heard of Lasting Powers of Attorney
, or LPA, do you really know what it means?
If you don’t, or you’re not sure, you’re in the right place. With this, the second of our series of posts on understanding LPAs, we’ll talk you through the basics of the Property and Finance LPA.
The first thing to know is there are two types; Health and Welfare, which we covered last month,
and Property and Finance.
What is a Property and Finance LPA?
A Property and Finance LPA is a legal document which gives the person, or people, of your choice the power to deal with your financial affairs and act on your behalf if you’re no longer able to or don’t want to. When the LPA comes into effect, those people are known as your attorney(s).
If you appoint a Property and Finance attorney, they make, or help make decisions about things like:
- Money, tax and utilities
- Bank and building society accounts
- Property and investments
- Pensions and benefits
They can also use your money to look after your home and buy your day-to-day items, such as food or clothes.
There’s a common misconception that if you’re unable to take care of your property and finances yourself, your partner, spouse or family are automatically able to do it for you. But unless they have been appointed as your attorney, they can’t.
This even includes things you may not have even considered, such as them accessing funds in a joint bank account or speaking to your phone provider if this is in your name. Without a valid Property and Finance LPA in place, they’re effectively powerless.
That’s why it’s important to have your affairs in order. So, should the day come that you need it, you and your loved ones can rest assured that provisions are already in place.
Is it safe?
It’s important you know what your attorney can spend your money on. As we’ve already covered, it can be for your everyday essentials, but it can also be on certain gifts or donations.
Unless you state otherwise, which you can of course do, your attorney will be able to buy gifts on your behalf for occasions such as birthdays or anniversaries in line with previous gifts you have given. They’ll also be able to donate money to charities you’ve donated to in the past in line with your previous donations.
However, for any other type of gift, such as paying someone’s school fees, or letting someone live in your property rent-free, they’ll need approval from the Court of Protection, even if you’ve done it before.
Your attorney also can’t spend money you may have ring-fenced for something else. For example, they couldn’t buy someone a gift on your behalf if it was going to impact your ability to pay for care.
You can read more about your attorney spending money on gifts here
When to appoint your attorney
There’s no right time to appoint your attorney. However, it’s always advisable to do it sooner rather than later, as you can only take out Lasting Powers of Attorney when you’re still of sound mind.
If you don’t create your Lasting Powers of Attorney while you’re of sound mind, your loved ones will have to apply for deputyship to act on your behalf. It can be a lengthy and expensive process and comes with no guarantee the people you would have chosen will be appointed.
As it’s difficult to predict the future, the quicker you act, the sooner you can relax.
When can your Property and Finance attorney(s) act?
You can appoint your Property and Finance attorney(s) at any time, and they can act for you at any time. However, they can only do so once you have a complete and valid LPA in place which has been registered with the Office of the Public Guardian. Though, it’s worth noting that only applies in England and Wales.
For Scotland and Northern Ireland, things are a little different. Just click on your respective country below for more information.
Unlike a Health and Welfare
attorney, whose power only begins when you’re no longer able to make decisions yourself, you can appoint your Property and Finance attorney(s) to act even if you’re still of sound mind.
Why appoint a Property and Finance attorney?
If you don’t want, or you’re no longer able to make decisions about your property and finance, appointing your attorney(s) can take all the stress away.
It can be your chosen attorney(s) helping you make decisions, or taking full control – the choice is yours.
What’s important is you fully understand what it means for you and your future. And that’s where our free LPA guide can help.
- Find out more about LPAs
- If you’d like to know more about Finance and Property LPAs, request your free guide from Key. Just pop in a few details and download your free digital guide straight away. We’ll also post a hard copy out to you at no extra cost.