Guest Editor

When considering appointing an Attorney you should first ask yourself:

1. Is this person good with paperwork?
2. Are they good with money?
3. Do you trust them to act in your best interests?

If the answer to any of these questions is no, then you should re-think your choice of Attorney.

How many Attorneys do I want and how should they work together

Once you have found the right person to act for you, you should then consider:

• Should they act on their own or should you have more than one Attorney?
• Do you need a Replacement Attorney in case they cannot act?
• If you appoint more than one Attorney then how should they work together?

You should only choose more than one Attorney to act on your behalf if you are confident that they will work well together. You will also need to choose whether they have to agree on every single decision (a joint appointment) or whether one of them can take the lead and make decisions without the other’s consent (a joint and several appointment) or a mixture of the two.  Please note that a “mixed” appointment must be very carefully checked for workability.

Powers and Restrictions

Once you have made all these decisions you should then consider the extent of the powers that you wish your Attorneys to have and whether those powers should be extended or restricted.

The LPA PFA gives your Attorney, amongst other things, the power to access your accounts, sell your assets and pay your bills.  It is an extremely powerful document and can be misused through ignorance, criminality or neglect.

There are many aspects that should be considered, including:

Taking independent financial advice

Your Attorneys should carefully consider how your funds are invested. The factors they should consider include your age and life expectancy, the value and nature of your resources including the impact on your tax position, your financial needs and your attitude to risk. They should also bear in mind any responsibility you have to other people, and the views of those who are interested in your welfare and also the impact of any such investments on support that would otherwise be received from the state.

Using a discretionary manager if appropriate

Your Attorneys do not automatically have the ability to delegate their responsibility to make investment decisions and therefore, in order for a discretionary service to be used, this power should be specifically given within the terms of the LPA PFA.

• Requirement for supervision

Do you want accounts be produced annually and shown to family members?  If so, then this should be clearly set out in the LPA PFA.  However, always bear in mind the first set of questions I posed – in essence, do you trust your Attorney?  While there is nothing wrong with making sure your Attorney is supervised, this should not be done as an alternative to finding an Attorney that you trust.

• Should you have a separate LPA PFA to deal with your business assets?

If you have business interests, do you want the same Attorney to make decisions about your business and about your personal finances?  You can have separate LPA PFAs to deal with the different aspects of your life.  They must be carefully drafted to make sure they do not overlap or contradict each other.

• Limits on making gifts and claiming expenses

Your Attorneys must apply to the Court of Protection for permission to make gifts or claim expenses which are in excess of their own limited powers.   Gifts can be made on customary occasions such as birthdays, wedding days and Christmas to people who are related to or connected to you or a charity that you support.  The value of the gift must not be unreasonable in all of the circumstances, in particular, in comparison with the size of your estate and your wishes and beliefs. Your Attorneys can be reimbursed for reasonable out of pocket expenses only unless a specific clause is included for payment of professional Attorneys.

In Summary…

A well-designed LPA PFA will give your Attorneys the powers they really need.  Using a specialist lawyer will provide you and your Attorneys with an explanation as to the extent of those powers and their limits and the accompanying responsibility.

For these reasons, you should seek legal advice when preparing an LPA PFA. Ideally, this should be from a lawyer with specialist qualifications such as STEP (Society of Trust and Estate Practitioners) and SFE (Solicitors For the Elderly).

 

Janette Wand is an Associate at Ashtons Legal in Ipswich. Fiducia’s Wealth Adviser Sarah Travers is a SOLLA (Society of Later Life Advisers) member, specialising in later-life care and retirement planning.

If you would like to know more about how we as Financial Advisers can help you with your or a loved one’s Long Term Care needs and general latter life planning then visit the Later Life Planning section of our website: Later Life Planning  or send us email at: email@fiduciawealth.co.uk

The information contained in website is for guidance only and does not constitute advice which should be sought before taking any action or inaction. The information is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly no responsibility can be assumed by Fiducia Wealth Management Limited, or any associated companies or persons, its officers or its employees, for any loss occasioned in connection with the content hereof and any such action or inaction. Professional financial advice is necessary for every case.

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Guest Editor