Acting as a Power of Attorney can be a stressful experience for many reasons, these can include that you are acting for a loved one and have maybe seen their health decline and also that running someone else’s finances can be confusing.
In my role at Wingate I deal with a number of ‘attorneys’ and have heard many a time that it is harder managing someone else’s finances than their own. The sense of responsibility can be greater as their decisions can have a direct impact on someone else.
It is worth noting that there are currently two types of Lasting Power of Attorney (LPA), these being Property & Financial Affairs and Health & Welfare. The following focuses on Property & Financial Affairs.
If a Property and Financial affairs Power of Attorney is in place, the attorney is able to make decisions about things like:
- Paying tax and bills
- Bank/Building Society Accounts
- Property and investments
- Pensions and State Benefits
An attorney is able to use the ‘donor’s’ (the person who the attorney is acting on behalf of) money to look after the donor’s finances and buy anything they may need; this could include food and clothes.
When acting as an attorney it is important to keep the finances separate, unless there are already accounts, investments etc in joint names and to keep a record of any expenditure/action taken.
An area that does come up is whether an attorney is allowed to make a gift on behalf of the donor.
This is permitted, unless the Power of Attorney states otherwise, money can be gifted on behalf of a donor to a friend, family member or acquaintance on occasions that gifts would have been normally made, for example a birthday. It is also possible to make donations to a charity that the donor wouldn’t object to, this might be a charity to whom a donation has been made in the past.
If the attorney feels any other type of gift is appropriate, for example for Inheritance Tax planning or paying school fees, the attorney must apply to the Court of Protection.
An attorney is able to seek professional advice should they feel they do not have the expertise or knowledge to deal in a particular area, this might include care fee planning or managing the donor’s investments. This can also help to take the pressure off the attorney and demonstrates that they sought professional advice in coming to a decision.
Being able to manage a donor’s portfolio of investments or work out the best way to pay any care fees can be a daunting prospect. At Wingate Financial Planning, using our expertise and the tools we have available we are able to assist attorneys and provide them with the advice and guidance they may need.
If you are acting as an attorney and would like to discuss how we may be able to help please do not hesitate to contact me for a ‘free’ initial conversation.