Whilst there are two types of Lasting Powers of Attorney (LPA) in the UK, the one we are talking about today concerns the management of your finances. This is known as a Lasting Power of Attorney for Property and Finance. It is usual to take both LPAs at the same time, the other is known as the Lasting Power of Attorney for Health and Welfare. Look out for our next blog post which will explain that in more detail.

What Is An LPA for Property And Finance?

A Financial Decisions Lasting Powers of Attorney (LPA) is a legal power that enables anyone aged 18 or over to nominate a person (or people) to make financially related decisions on their behalf if they become incapacitated . You can allow your nominated person to make decisions at any time, not just when you lack capacity.

Decisions might include:

• Opening, closing and using your bank and building society accounts.
• Claiming, receiving and using your benefits, pensions and allowances.
• Paying your household, care and other bills.
• Making or selling investments.
• Buying or selling your home.

It is possible for a Finance LPA to be used by the attorney whilst you still have mental capacity. However, you can set up a Financial Decisions LPA that includes a restriction allowing someone to act for you only if you lose mental capacity. 

You do not have to be a homeowner or have a large number of assets to make an LPA for finance. You might, in the future, have difficulties managing your shopping budget, direct debit payments or subscriptions and want someone to help. You can appoint different attorneys for your personal finances and your business affairs (in this case you must fill in two LP1F forms).

As with an LPA for Health and Welfare, an LPA for Finance can only be used after it has been registered at the OPG. Decisions such as those listed above will directly protect you and your finances. This is why it is very important that your attorney is a person you know and trust. 

Do I Need Lasting Powers Of Attorney for Property And Finance?

It is always a good idea to at least think about making provisions for the future provision of your assets and financial wellbeing. By taking it into consideration now, your choices will be recorded and therefore carried out, meaning your financial security is looked after in the way you would like. 

What Are The Risks Of Not Having Lasting Powers Of Attorney For Finance?

If an LPA is not in place before a loss of capacity, then for the individual’s affairs to be looked after, it will be necessary to make an application to the Court of Protection.

Once someone can no longer deal with their own financial affairs, then unless an LPA is in place, the individual’s assets are effectively frozen. Money cannot be accessed, even to pay for essential services. In this situation, an application to the Court of Protection is essential so the Court can appoint a Deputy to act in the individual’s best interests. The Deputy appointed will ultimately be the Court’s decision not necessarily yours, and will be the person who will act as Attorney for the individual under the Court’s supervision.

There are a few reasons you might not want this to happen: 

• You have no choice who will be appointed. 
• If a professional Deputy is appointed, such as a solicitor, this person may be a stranger.  
• The process can be distressing and intrusive for your family.  
• The process is very expensive. 
• An application to the Court can be a difficult process. Legal advice should be taken which means legal fees.  There are court fees and ongoing fees throughout the Deputyship. The Court will wish to supervise the Deputy and will charge for the pleasure.  
• The Deputy has to take out a “security bond” to cover their actions which is also paid annually.  
• An application can take several weeks and until a Deputy order is made, your affairs are frozen.  
• There can be further delays as medical evidence is sometimes required. Some medical practitioners charge for providing medical evidence.  
• Once the court has appointed a Deputy, the Deputy will receive a Deputy Order which sets out specific powers depending on your individual needs. These powers cannot be exceeded.  
• There are ongoing responsibilities for a Deputy such as filing annual accounts and reporting and accounting for all financial transactions made. This is not only painstaking but expensive.

How Much Does An LPA For Finance Cost?

The application fees for an LPA (UK) as they stand are £82 per Power of Attorney. 

It is advisable to always get a quote before you proceed.

Lasting Powers Of Attorney Fees

You (the donor) will have to pay an initial registration fee of £82 to register a Power of Attorney (in England and Wales – it’s £82 in Scotland, £151 in Northern Ireland. Read about discounts below).  This charge applies per specific type of Lasting Powers of Attorney. Therefore, to organise an LPA for finance as well as one for health and welfare, you would need to pay £164.

If you wish to make amendments or request a repeat application you will need to make another payment but the registration fee will be reduced by 50% to £41. (If you pay the higher amount or if there is more than one application, refunds are available).

If you want to ensure you create your Lasting Power of Attorney correctly, we would strongly recommend that you seek the support of a professional. Mistakes can have significant implications for you and your loved ones at a later date.

Discounts

There are concessions and exemptions to some Powers of Attorney expenses available – for example those in receipt of Income Support, Housing Benefit, Jobseeker’s Allowance or work-related Disability Benefit payments may get a discount of 50% on the initial registration fee.

To find out whether you are eligible for a reduction or exemption from the power of attorney cost, you can speak to the Office of the Public Guardian (OPG) for individual advice. 

Do I need a Professional to make an LPA?

You can make and register an LPA yourself, however there are dangers in doing this. If any mistakes are made, your LPA could be rendered invalid, meaning that your family will need to apply to the Court of Protection to handle your affairs.

By talking to an LPA provider you can not only be confident that your LPA will be valid but also receive specialist advice on what your LPA will need to cover.