A guide to Power of Attorneys

Financial planning is not only about saving and investing for the future. It also includes making sure your money and personal affairs can still be managed if you are ever unable to deal with them yourself.

A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint someone you trust to make decisions on your behalf if needed in the future. In England and Wales, there are two types:

• Property and Financial Affairs LPA. Covers decisions about money and assets, such as bank accounts, bills, pensions, investments, and property
• Health and Welfare LPA. Covers decisions about medical treatment, care needs, and living arrangements

Both types must be set up while you still have mental capacity, meaning you can understand and make the decision yourself.

This article applies to England and Wales and focuses on Property and Financial Affairs LPAs. Separate arrangements apply in Scotland and Northern Ireland. Further information on both types of Lasting Power of Attorney is available from Citizens Advice.

Why a financial LPA matters

A Property and Financial Affairs LPA helps ensure someone you trust can manage your money and financial matters if illness, injury or loss of capacity means you cannot do so yourself.

Without one in place, even close family members cannot automatically access or manage your finances. This can create delays at a time when important payments may still need to be made, such as mortgages, household bills, or pension income.

Instead, they would usually need to apply to the Court of Protection to be appointed as a deputy, which can take time and may involve additional cost and complexity.

What a financial LPA can help with

A Property and Financial Affairs LPA can allow your chosen attorney to manage things such as:

• Bank accounts and savings
• Bill payments and everyday expenses
• Pension income and retirement finances
• Tax matters and financial correspondence
• Investments and financial products
• Property decisions, including selling or maintaining a home if required

A Property and Financial Affairs LPA can also be used while you still have capacity, if you choose, for example if you are abroad or need help managing your finances temporarily.

Who might consider setting one up?

A Property and Financial Affairs LPA can be relevant at many stages of life, including for:

• Homeowners with ongoing financial commitments
• People with pensions, savings, or investments
• Business owners who want continuity in financial decisions
• Couples who want clarity over financial responsibilities
• Anyone wanting to plan ahead for unexpected illness or incapacity

What happens without one?

If someone loses capacity without an LPA in place, family members cannot automatically step in to manage their finances. An application would need to be made to the Court of Protection, which can take time before authority is granted.

Cost and setup

In England and Wales, the registration fee for a Lasting Power of Attorney is £92 per document, payable to the Office of the Public Guardian. Some people may qualify for a reduction or exemption. Applications can be completed through GOV.UK or with support from a solicitor if preferred. An LPA must be registered before it can be used.

In summary

A Property and Financial Affairs LPA is a practical way to plan ahead without giving up control. It helps ensure decisions about your money can still be made in line with your wishes if you are ever unable to manage matters yourself, while reducing stress and delay for those close to you.

This article is intended as general information only and is not legal advice. Anyone considering a Lasting Power of Attorney should consider their individual circumstances and seek professional advice if needed.