Property and Financial Lasting Power of Attorney

This podcast is focused on personal and financial matters. If you are a business owner,  you can also listen to our podcast relating to business related decisions.

What is a Property and Finance LPA?

Technically, it’s a legal document that allows you to appoint someone (called an attorney) to manage your financial affairs and property if you become unable to do so yourself.

You can also choose the option to allow people to act even if you do have capacity.

Why do I need a LPA for finance? What happens if I don’t have one?

I can’t think of a single person who doesn’t have a need for one. It’s important to have a Property and Finance LPA when you own property, because you may not be able to move home without one. Your loved ones may have to go through the courts to pay household bills.

Everyone is advised to consider a Property and Finance LPA. Although we don’t deal with it in this podcast, you should also consider a Health and Welfare LPA, which are separate.

Can you manage someone’s finances without a LPA?

You may need to apply to the Court of Protection to be appointed as a deputy or a guardian, and the Court may only allow you to make very limited decisions.

It’s possible you might be able to manage finances if you’ve got a joint account with your partner or spouse. But it’s very likely you would need an LPA if, heaven forbid, you lost capacity – if you had a stroke, for instance, and weren’t able to sign documents or or speak clearly.

Do you need a Property and Finance LPA if you have a Health and Welfare LPA?

Yes. They are separate and you need Property and Finance LPA if you have a Health and Welfare one. A Health and Welfare LPA does not give your attorney the right to manage financial affairs.

You can appoint an attorney to make decisions about care needs with the health and welfare LPA, but they would also need access to pay the funds to pay for your care. That would require a Property and Finance LPA.

It doesn’t have to be the same person, but somebody needs to be able to access the funds to pay for your care.

What decisions can a LPA make in respect of your financial affairs?

The list could go on and on, depending on different people’s circumstances. But for a typical household, it would be banking transactions, managing bank accounts including depositing and withdrawing funds, writing cheques, transferring money, and then paying bills and managing expenses to ensure financial obligations are met.

Property transactions are a key element. Imagine if you suddenly had a stroke and you were in the middle of buying or selling a property – it could cause tremendous problems. An LPA allows an attorney to manage buying, selling, leasing and managing property on behalf of the person who makes the LPA (“the donor”).

They can also look after investment decisions, buying and selling stocks and shares, bonds, etc. They would deal with tax authorities and make sure everything is up to date. The attorney looks after pensions and benefits for people who are retired or making pension contributions.

The LPA also covers debt management, borrowing money, repaying loans and just making sure your credit card doesn’t build up – and you’re not paying high interest on it. Plus, it includes financial planning: developing and implementing financial strategies to ensure your long term financial stability.

What decisions can an attorney not make?

They can’t make decisions to do with your health or your care, as those are covered by the separate Health and Welfare LPA.

It’s possible that you can write a document that explicitly excludes certain powers for your attorney. Your attorney can’t engage in any illegal activities or make decisions that would violate the law, and they must avoid any conflict of interest.

So, you’ll want to choose an attorney who’s not going to necessarily benefit due to existing business or other contracts. There are also certain decisions such as making a will which can’t be done by an attorney.

When can a LPA for Property and Finance act?

When you apply for the document, there are two options listed in the form. One is for the attorney to act as soon as the LPA is registered. The other option is only when the donor has lost capacity.

The second option was the common choice when these were first produced, but since then we and the Office of the Public Guardian have found that it can make things complicated. If you tick the box to say it only comes into force when you have lost capacity, the attorney will find it difficult to use if you go in and out of capacity – they may need to get a doctor’s certificate every time they want to use the document.

So, it’s often better to tick the box saying as soon as the LPA is registered.

The old Enduring Powers of Attorney gave more powers than today’s versions, in the sense that the attorney now has to act in your interest. You’re not giving them permission to use your money how they wish. They must use it for your benefit.

If you’re able to express yourself in any way, they must follow your wishes, even if they disagree with them.

How much does a Property and Finance LPA cost?

A high street solicitor tends to charge £1,000 per document, with the registration fee on top. Our fees haven’t changed for many years – we still just charge £350 plus VAT for each LPA. You also need to budget another £82 to register each of the documents with the Office of the Public Guardian.

We do a combined offer of £550 for a Property and Finance and Health and Welfare LPAs. For a couple it’s £650 for a Property and Finance LPA. [information is correct at the time of recording in September 2024]. 

What are the benefits of a Property and Finance LPA? Are there any risks?

I ran through a list of the decisions an attorney can make, which include managing your bank or building society accounts, paying bills and collecting your pension or benefits. Also, if you went into long term care, it would allow for selling your home to help pay for your care and make sure you have the best treatment.

Nearly everyone will have a desire for a LPA if the need arises.

I go into the pros, cons, benefits and risks of LPAs in another podcast, the Business Lasting Power of Attorney podcast. So if you want to dig down a bit deeper, please feel free to look at that one.