For those looking after the financial affairs of vulnerable individuals, the responsibility of managing someone else’s money is onerous. In this article we take a brief look at the role of Lasting Power of Attorneys (LPA).
The Office of the Public Guardian applies in England and Wales.
Powers of Attorneys can be established while individuals are still mentally capable.
Those looking after the affairs of others need to be aware of their powers and limitations.
Managing your own money is one thing. Managing someone else’s money is an entirely different matter.
Those acting on behalf of someone else should keep the donor’ s money and property separate from their own.
In broad terms, attorneys and deputies acting for older clients should generally consider the provisions of the Trustee Act and timescale.
An LPA is a legal document that lets the ‘donor’ appoint one or more people (known as ‘attorneys’) to help make decisions or make decisions on the donor’s behalf. This gives more control over what happens to the donor if they have an accident or an illness and can’t make their own decisions (they ‘lack mental capacity’). The donor must be 18 or over and have mental capacity (the ability to make their own decisions) when the LPA is made.
There are 2 types of LPA, and the donor can choose to make one type or both
health and welfare
property and financial affairs
A property and financial affairs LPA will give an attorney the power to make decisions about money and property for the donor, for example
money, tax and bills
bank and building society accounts
property and investments
pensions and benefits
Attorneys must keep the donor’s finances separate from their own, unless they already have something in both of their names like a joint bank account or they own a home together.
If an investment is made under a property and financial affairs LPA, then the investment will be owned by the donor and not the attorney. The attorney will need to refer to the LPA to determine the investment powers available and act accordingly.
Attorneys must always act honestly and in the donor’s best interests.
Once made, the LPA should be registered with the OPG.