14 October 2021

Managing financial affairs under a lasting power of attorney

By Susan Dayment, Associate Solicitor, Hayes + Storr.

Making a lasting power of attorney (also known as an LPA) for your finances is an important part of lifetime planning. An LPA should be set up well in advance of when it might be needed, although it can be difficult to predict when that might be. If in the future you have an accident or illness, like dementia, an LPA enables other people (your attorneys) to help make decisions on your behalf.

In addition to managing bank accounts and selling property, an LPA clarifies your wishes on a wide range of financial decisions, including if you have a business or complex investments.

Funds

You may have investments in certain funds which require your express consent or discretionary management funds to be set up before your attorneys can be authorised to deal with them.

Overseas assets

If you hold overseas assets, an LPA made in England and Wales may not be recognised by the jurisdiction in which those assets are held. You will need legal advice for each jurisdiction to ensure your attorneys can act on your behalf in the different territories.

Gifts

Attorneys can make small gifts in limited circumstances on your behalf, but you may authorise them to make larger or more regular gifts. For example, you may wish to make such gifts for tax planning purposes, or because you would like to provide financial assistance for family members who need extra support. Whatever the reason, you will need to include a specific authority to allow such gifts to be made.

Dependants

You may be concerned about a family member or another dependant who relies upon you financially, especially if they are unable to manage their own finances.

Business assets

If you have any interest in a business, you should ensure that the appointed attorneys have the necessary insight and business acumen to continue to run things smoothly. If you wish to appoint separate attorneys for your business decisions, you will need to make two separate financial lasting powers of attorney, one for your personal financial decisions and one for your business decisions.

Avoiding common mistakes

Many people choose to appoint the friends or family closest to them without considering whether they are suitable for the role. If they are not good with their own money, think carefully about trusting them with yours. There may also be times where your interests could conflict with theirs.

Careful considerations
• You can decide when your LPA comes into force.
• Your attorneys must always act in your best interests.
• You may need to include specific instructions to extend your attorneys’ powers.
• You should appoint more than one attorney or replacement attorneys who would step in if your first choice of attorney can no longer act for you.

For further information, please contact Susan Dayment on 01263 825959 or email susan.dayment@hayes-storr.com.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

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