Lasting Powers of Attorney – Property & Financial Affairs
This LPA relates to money, which most people think of as the money in the bank and the house in which they live, but not beyond that too much. It covers all financial assets, including every teaspoon in the kitchen, every piece of jewellery and every collectable. Often the house and money in the bank are the most valuable assets, but it should be remembered that it covers everything you own.
So what can you do with it? Whilst the Donor, the person creating the LPA and granting the power to someone else has capacity, the Attorney can only as they have been asked. The Attorney effectively becomes your legs to do your running around if you cannot get to the bank to do it for yourself. The Attorney should not be making decisions for themselves, they can advise the Donor, but cannot enforce their opinion upon the situation.
Only when the Donor has lost capacity can the Attorney make decisions for them on their behalf. So what can the Attorney do? The answer is relatively simple – everything that you can do with your money EXCEPT make significant gifts. They can buy and sell assets, open & close accounts, borrow or repay money; they just have to do it for the Donor and have to preserve the Donor’s estate, so nothing very risky – no betting it on the Derby races!!
Small gifts are fine, but they have to be reasonable and proportionate to the size of the overall estate. If the Attorney wants to make larger gifts, then the only way is by application to the Court of Protection, which is an involved and costly process, but in the right circumstances, the appropriate action to take. If there is any doubt about the gift, then it is probably better to err on the side of caution and not make the gift rather than make it.
Expenses are fine too, but again, they must be reasonable and proportionate to the size of the estate. There are some things that are expected of a son or daughter, ie visiting your mother/father in a care home, so the petrol costs to visit would not be reasonable, as you should be visiting anyway. If you are writing a letter for the sole purpose of dealing with the affairs of the Donor, then the postage costs are fine. As with gifts, if in doubt, don’t do it, preserve the estate for the Donor.