A Lasting Power of Attorney (LPA) is a legal document that allows you to choose someone to manage your affairs should you lose the mental capacity or ability to do so yourself. They allow you to plan for your future, protect your finances and can reduce family conflict by clearly stating your wishes regarding your finances.
Given the power that is being handed over to trusted family members, friends or professional attorneys it is not surprising that they are tightly regulated. They are also increasingly commonplace.
All Lasting Powers of Attorney need to be registered with the Office for Public Guardian, a government body that polices the activities of those appointed as attorneys. In 2022, it reported that 848,896 LPAs were registered, an increase of over 20% on 2021. Over the last five years, a total of 3.8 million LPAs have been registered.
There are two types of LPA – one that covers property and financial affairs, and one that covers health and welfare decisions. This article focuses on property and financial affairs.
A financial LPA allows your attorney to pay bills on your behalf, make or change investments, move money between bank accounts and even sell your home. All of this can be done whilst you still have the mental capacity to make these decisions should you wish.
Choosing who should act as your attorney is, understandable, an important decision. It is often your spouse, children, a close family friend, or a professional such as a solicitor or accountant. It is also possible to have more than one attorney, often a combination of those mentioned above. Indeed, having a professional attorney, such as a solicitor, independent from the family can prove invaluable in removing tensions or providing advice where finances are complex.
Where multiple attorneys are appointed, you will need to decide whether the actions they can take need to be agreed jointly or whether individual attorneys can make decisions on your behalf independently.
An LPA is a simple and quick document to create. It should be created with the support of a solicitor, setting out what decisions an attorney can and cannot make. Once agreed it will need to be signed in the presence of a witness before being registered with the Office for Public Guardian.
Naturally, you need to have the mental capacity to understand the document that is being created and the decisions that attorneys can make on your behalf. Importantly, your solicitor can make sure no undue influence is being exerted on you.
Despite the number of LPAs being registered every year, there is still the misconception that if a loved one were to lose capacity you or perhaps your children would be able to step up and make decisions about their finances automatically. That is not the case. The Court of Protection will typically appoint a deputy to make those decisions on your behalf.
It is possible for family members to apply to the Court of Protection for a deputyship order so they can take control over your finances, but that can be time-consuming and expensive. An LPA is a much simpler and cheaper route.
Contact our Private Client Solicitors
If you are in need of advice or assistance on any of the legal issues mentioned in this article please contact Olivia Meekin, Partner or any member of our experienced Private Client team on 020 7631 4141 or email email@example.com
The above is accurate as at 28 November 2023. The information above may be subject to change.
The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.