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During April we looked at Personal Welfare LPAs to manage your health and welfare. This month we look at Property and Financial Affairs LPAs, their importance and what it means to you to have one in place alongside your Personal Welfare LPA.

LPAs came into effect in 2007. The previous arrangement only protected an individual’s financial affairs when they were unable to do so.

The LPA looking after health and welfare was introduced alongside the Property and Financial Affairs LPA. Both work together to protect you when you are most vulnerable and cannot look after yourself. This could be through an accident, illness or more often these days the onset of dementia.

So there are two LPAs for individuals:

  • Property and Financial Affairs LPA
  • Personal Welfare LPA

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Why should I have a Property and Financial Affairs LPA?

There are a number of reasons why you should consider a lasting power of attorney for property and finance:

  1. In the event that you are incapacitated your financial needs will be met. Bills will continue to be paid, your liabilities will be looked after (mortgage, loans etc)
  2. Your financial affairs will be taken care of by people that you select and trust
  3. If an LPA is not in place any joint bank accounts will be frozen and only accessible for emergencies.
  4. The local authority will not have any legal right or control over your finances
  5. Your business affairs will be managed in your absence

Our short video considers what a Property and Financial Affairs LPA is and the benefits to you

When you are at your most vulnerable you don’t want to have the worry of what’s happening with your finances. You want to be secure in the knowledge that you will have a roof over your head and that you’ll be taken care of.

Joint bank accounts can be frozen without an LPA in place which will impact your partner.

Restoring a joint bank account requires an application to the Court of Protection, and can be costly and time consuming.

Ceramic Piggy Bank
Your finances will remain in good order and managed by trusted people

In short, your day to day finances will remain unchanged so your bills will be paid, your responsibilities met and your loved ones can concentrate on your care, not on financial “what ifs”.

Who looks after my financial affairs?

That really is up to you. It must be a responsible person and may be one or several people. That choice is yours. If you choose to appoint more than one person they must make decisions together.

An individual is not permitted to act as an attorney if they are bankrupt as they are not considered suitable due to their own financial position.

But you could choose close friends, family members or a professional, or a mix of all three. It really is up to you to appoint the people you trust and are comfortable with acting on your behalf.

The whole process is governed by the Mental Capacity Act and managed by the Office for the Public Guardian.

What can the attorneys I appoint actually do?

They have a number of responsibilities, and their duties include:

  • Paying bills and managing bank accounts
  • Selling, renting or managing your property.
  • Continuing your business affairs
  • Honouring any contractual obligations
  • Conducting legal proceedings on your behalf

Your attorneys may also make gifts. For example they make donations to charities that you have given to in the past, or give to people close to you in the event of marriage or birthdays.

Attorneys are required to keep detailed records of your financial transactions and must keep their own personal finances and your affairs completely separate, but most importantly they must provide a duty of care to you and there should be no benefit to themselves.

Will my wishes be carried out even if a local authority wants to take control?

There are cases where local authorities have tried to employ various tactics to overturn LPAs but this is where the Mental Capacity Act comes into play and protects you. Your attorneys must be vigilant though. The Office of the Public Guardian has written that it is outside its remit to investigate local authorities.

There is an interesting blog here that examines one particular case

And the Government has been campaigning to encourage people to arrange LPAs.

I have a business what about that?

This can also be included in your LPA and the process is the same. Your chosen attorneys will continue to take decisions on your behalf that are in your best interests. You can also set up a separate LPA specifically for business. We will be covering this in our blog in June.

Your attorneys will continue to pay the bills, make decisions and work with any business partners or fellow directors that you have to keep the business running.

How is this governed?

There is a five point test to ensure that people have the mental capacity to create an LPA, and this is the responsibility of the Certificate Provider to assess. The test has been created by the MentalCapacity Act 2005 that creates the LPA process, and this also includes a Code Of Practice. Should there be suspicions that an attorney may not be acting in the best interests of the person holding the LPA the Office for Public Guardianship can arrange an investigation, and this in turn can be referred to the Court of Protection which was set up for this purpose. So there are checks and balances in place to govern the process and behaviour to ensure people are protected when they are in need of support.

How can Will Protect help?

The application process can be a minefield and the Office for the Public Guardian doesn’t provide guidance on how to complete the application forms.

Our team will take you through all of the steps so that you fully understand the process and what you need to do, submit the paperwork and liaise with you to deal with any queries that you may have.

We understand that these are difficult and sensitive matters, and we will support you with a sympathetic, understanding but professional hand so that your wishes are recorded accurately and effectively and ultimately your best interests are always protected.

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