Lasting Power of Attorney for Property and Financial affairs will give someone the power to make decisions about how your money is spent. You can give this power at any time, though usually it’s for when you’re mentally incapable.
Managing money and looking after property isn’t as easy as it seems. Many people struggle to make good financial decisions, or to handle their money correctly. Of course, that struggle becomes even more severe if someone’s lost mental capacity.
Sadly, losing mental capacity could happen at any time. An illness or injury could affect your ability to manage your estate. By giving someone Lasting Power of Attorney over financial affairs, you allow them to make decisions on your behalf if you’re not able to.
Read on for more about Lasting Power of Attorney for Property and Financial Affairs.
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Lasting Power of Attorney for Property and Financial Affairs is one of two types of LPA. The other covers Health and Welfare.
With an LPA for Property and Financial Affairs, you can give an attorney (chosen by you) the power to look after your money. They’ll be able to make decisions about bank account management and what your money is spent on. They can also make decisions about buying property, selling it and maintaining it. Decisions can be made about bill payments, investments and any benefits or pensions.
Unlike Health and Welfare Lasting Power of Attorney, which only becomes active once someone has lost mental capacity, the Property and Financial LPA can be active at any time. As soon as you’ve set it up, you can voluntarily make it active so that someone takes control of your money.
You might choose to make a Financial LPA active straight away for several reasons. Perhaps you have an addiction that you’d like to get under control, or maybe you have a disability that makes it hard to manage money and pay bills? Think carefully about giving someone the power to take control of your bank accounts.
Being an attorney is a big responsibility. You get to choose your attorney(s), so you should make sure that you pick people that have got your best interests at heart.
Your Financial Lasting Power of Attorney can be set up in advance. When filling in the forms, you can indicate when it should come into play. Usually, people set up Lasting Power of Attorney to be active if they’ve lost mental capacity, though with a Financial LPA you do have the option to make it active as soon as it’s been processed.
You should always set up Lasting Power of Attorney whilst you have mental capacity. This doesn’t mean it will be active straight away, but does mean that it’s ready if it’s ever needed.
Even with Lasting Power of Attorney, your attorney(s) must help you to communicate. They can’t make any decision without first doing their best to find out what you really want. Your attorney(s) should allow you to communicate your wishes if you’ve got any way of doing so. Small things like eye movements, hand squeezes or timed blinking are valid communication methods. Your attorney(s) can only step in and make decisions if they’ve exhausted every other avenue.
If you’ve chosen to give someone Lasting Power of Attorney whilst you’re still mentally capable, you can express a verbal or written wish for someone to make a choice for you.
You must be mentally capable of setting up your own Lasting Power of Attorney. If you know that your mental capacity is fading, make sure you don’t leave this too late.
Some people know that they won’t continue to have mental capacity for long. This might be the case if you’ve been diagnosed with a condition like dementia.
Sometimes, people lose mental capacity without any previous warning. This can happen as a result of an unexpected illness or accident, even at a young age.
It’s never too early to set up Lasting Power of Attorney, though there’s always a chance that you could leave it too late.
Most people in good health don’t think to set up Lasting Power of Attorney. Most people don’t need to, but you should act as soon as possible if your mental capacity starts to deteriorate.
Fill in the LPA forms online, to give someone Lasting Power of Attorney. If you’d prefer not to work on a computer, you also have the option of download and printing your Lasting Power of Attorney forms.
It’s surprisingly simple to fill in your Lasting Power of Attorney forms, which comes with lots of guidance and with most questions clarified. If you need extra help to make sure you’ve got things right, speak to legal professionals like your preferred solicitor.
Always make sure that you’re filling in the right forms for your LPA. Don’t fill in the Health and Welfare forms if you only want to give control of your property and money.
Before filling in your forms, you’ll need to have spoken to your chosen attorney(s). You might also want replacement attorneys that can step in if your first choices aren’t able to. In addition you’ll need a Certificate Provider, someone like a doctor or teacher, who has known you for at least two years and can verify your mental capacity.
You have the option to name people to notify, if you’d like to include them. These people will be formally told about your LPA application. This is a good way to protect yourself, since the people you’ve notified can raise concerns if they think you’ve acted under duress.
To apply for Lasting Power of Attorney for Property and Financial Affairs, you will need to pay £82. Your £82 fee covers the costs of processing your application.
You may be able to get your fees waived if you receive certain means-tested benefits. You could also get a 50% reduction if you earn less than £12k per annum.
To pay your fees, you can send a cheque along with your paper application. Make sure your name is on the back of the cheque so that it can be successfully processed. You can also pay online, or ask for a call to make a payment by card over the phone.
An attorney must make decisions about money and property, on behalf of the donor. They can decide to buy and sell property, invest or make decisions about spending.
If there’s a separate Health and Welfare attorney, the two must work together successfully. The Health and Welfare attorney might need to ask for money for days out, care items and clothing. It’s up to the Property and Financial attorney to approve any spending requests.
One person can act as a Property and Financial Attorney as well as looking after Health and Welfare, though a donor might prefer to give two different people the power to make these decisions.
Naming one attorney means that all decisions are specifically theirs to make. If they can no longer fill this role, your LPA may no longer be valid.
You can choose several different attorney(s) and have them work together, or not. If you’d like, they must work jointly and come to an agreement before any decision is made. You might instead allow each attorney to make decisions on their own, or you can specify which types of decisions must be made by all attorneys together.
If attorneys must work jointly, this slows the process down but might help to protect your interests. If one attorney is no longer able to act, the rest can no longer do their jobs.
If attorneys work separately, decisions can be made a lot more quickly. You must trust that every individual attorney has your best interests at heart.
Here at Money Savings Advice, we have partnered with one of the UK’s leading LPA & Will-writing companies, and they are members of The Society of Will Writers, and they have already helped thousands of our readers get the right Will & LPA in place.
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