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What is a Property and Financial Affairs LPA and why do you need one?

Our People - Chryso Loizides
5 July, 2023

A Property and Financial Affairs LPA is a legal document which gives another person or persons (known as your ‘attorneys’) the authority to make decisions on your behalf, like buying or selling property, making investments, paying your mortgage and bills, and giving people access to financial information about you. That authority can be used by your attorney while you have capacity and continues even if you lose the mental capacity to make those decisions yourself.

If you lose capacity to manage your financial affairs without a property and financial affairs lasting power of attorney in place, the court may appoint a professional deputy and decide on their powers, which may cause delays, as well as increase overall costs.

Why should you have a Property and Financial Affairs LPA?

You can plan for the future by creating a property and financial affairs LPA, which allows you to choose someone you trust to make decisions for you if you lose capacity (for example through dementia or injury). This can be anyone such as your spouse, a family member or a friend you trust.

What are the risks of not having a Property and Financial Affairs Lasting Power of Attorney?

If you lose capacity, you will no longer be able to decide who makes decisions for you, and there will be no one, chosen by you in advance, who has the right to make decisions on your behalf regarding your property and finances. This is why it is important to plan ahead with a property and financial affairs LPA.

Your family and friends will have no control over what decisions are made on your behalf, and will have to go to court if they want to make decisions on your behalf or challenge someone else’s decisions made for you, which can be much more expensive, time-consuming and stressful than making a property and financial affairs LPA.

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

Yes, you do. Most people prefer to make both a property and financial affairs LPA and a health and welfare LPA as it ensures their attorneys will be able to make decisions for them in all the crucial aspects of their lives.

A health and welfare attorney cannot make decisions about your property and financial matters. For example, they can choose the care home in which you live, but they cannot arrange payment of the care home fees.

Also, an attorney can act on behalf of a donor who still has capacity under a property and financial affairs LPA, but an attorney can only act once a donor lacks capacity under a health and welfare LPA.

How do I make a Property and Financial Affairs LPA?

To make a property and financial affairs lasting power of attorney, you only need to be aged 18 or over and have the capacity to make the same decisions that you want to authorise someone else to make. You need to complete the necessary forms, including having someone attest to the fact that you have the capacity to grant a power of attorney and the paperwork needs to be registered with the Office of the Public Guardian before it can be used.

Whom should I name as an attorney for my Property and Financial Affairs LPA?

Ideally, when you’re deciding on whom to name as your attorney for your property and financial affairs LPA, it’s advisable that you speak with this person before you name them and be certain that the person is 18 or over.  You can name multiple people to act as your attorneys and you can specify whether the attorneys can act individually or if they need to take decisions jointly (i.e. where they all agree).

Can the attorney for a Property and Financial Affairs LPA also be appointed as the attorney for a Health and Welfare LPA?

Yes, you can name the same person as an attorney for both types of LPA, but you will need to fill in two forms, one for the property and financial affairs LPA, and another for the health and welfare LPA.

A solicitor can help you obtain the right forms and fill them out correctly.

How much does a Property and Financial Affairs LPA cost?

We always charge a fixed fee for preparing a property and financial LPA, so you will be in full control over how much you spend.

Our current fees for a property and financial affairs LPA is £500 for one or £750 if you’re having both types of LPA + VAT (at 20%).

There is also a fee of £82 to register each type of LPA with the Office of the Public Guardian. If you’re on a low income, you may be eligible for a 50% discount, and if you’re receiving means-tested benefits you won’t have to pay the registration fee at all.

6 benefits of having a Property and Financial Affairs LPA

  1. Choose who makes financial decisions on your behalf
  2. Your attorney can act immediately on property decisions
  3. Decide on what powers your attorney have
  4. Cheaper to initially set up a property and financial affairs LPA
  5. Attorneys need to file accounts every year
  6. Avoid paying for a professional deputy

1. Choose who makes financial decisions on your behalf

If you lose capacity, someone you have chosen, rather than a court or a professional deputy you don’t know, can take decisions on your behalf regarding your finances.

2. Your attorney can act immediately on property decisions

Your attorney can start making decisions on your behalf immediately (provided the financial LPA is registered).

3. Decide on what powers your attorney have

You can decide what if any limits or restrictions you want to place on the powers that the attorney(s) have, e.g. you can specify that they must not sell your home.

4. Cheaper to initially set up a property and financial affairs LPA

The cost of setting up a property and financial affairs LPA is much cheaper than your family needing to apply to the Court of Protection to be appointed as a deputy.

5. Attorneys need to file accounts every year

Your attorney will be overseen by the Office of the Public Guardian and must file accounts every year to show what decisions they have taken regarding your property and finances. This provides essential and reassuring accountability.

6. Avoid paying for a professional deputy

Having a property and financial affairs LPA in place avoids your money being used to pay a professional deputy.

5 risks of not having a Property and Financial Affairs LPA

  1. Family excluded from making important decisions
  2. Increased costs for a professional deputy
  3. Delays in appointing a deputy
  4. Court decides on the powers of the deputy
  5. Deputy may not understand your wishes

1. Family excluded from making important decisions

If you’re left with a professional deputy taking decisions on your financial affairs, your family are likely to feel upset and angry at feeling excluded from important decisions taken about your property and finances.

2. Increased costs for a professional deputy

The cost to your family for applying to court to make decisions on your behalf, including court fees and solicitor’s fees, will be much more expensive than setting up a property and financial affairs LPA in advance (estimated at £1,500 – £2,000). If a professional deputy is appointed by the court instead of allowing your family members to make financial decisions for you, their professional fees will also be significant. They will charge for their time each year they operate as your deputy, their charges will reduce the money left for your care.

3. Delays in appointing a deputy

The Court of Protection can take months to appoint a deputy to take decisions on your behalf. This delay can place a financial burden and cause stress on your family, who may not be able to access your finances or manage your affairs while the proceedings are ongoing (including your spouse).

4. Court decides on the powers of the deputy

If the court appoints a deputy to make property and financial decisions for you, the court will decide what powers they will be given. These powers may not cover everything you would like your family or friends to be able to do on your behalf.

5. Deputy may not understand your wishes

A court-appointed professional deputy may not understand your wishes regarding your property and finances in the same way that an attorney appointed by you would.

For more information about preparing and registering your property and financial affairs LPA, or have any issues relating to Lasting Powers of Authority, please contact our Power of Attorney Solicitors for a free consultation on 020 8492 2290 or email us at sols@gnlaw.co.uk.

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