{"id":720,"date":"2022-09-27T08:00:00","date_gmt":"2022-09-27T07:00:00","guid":{"rendered":"https:\/\/ctt-group.co.uk\/tax-trust\/?p=720"},"modified":"2023-09-20T11:44:13","modified_gmt":"2023-09-20T10:44:13","slug":"guidance-for-property-financial-affairs-attorneys","status":"publish","type":"post","link":"https:\/\/ctt-group.co.uk\/tax-trust\/guidance-for-property-financial-affairs-attorneys\/","title":{"rendered":"Guidance for Property &amp; Financial Affairs Attorneys"},"content":{"rendered":"<div class=\"standard-content container wp-block \">\n\t\t<div class=\"content\">\n\t\t\t<p>If a person lacks capacity, a Lasting Power of Attorney (LPA) will designate someone to help them with decision-making.<\/p>\n<p>Mental capacity means having the ability of making and communicating your own decisions. If a person lacks capacity, they will be unable to comprehend information on a specific topic, retain or weigh that knowledge to make a decision on it, or communicate the decision they have made.<\/p>\n<p>Being an Attorney under a Property and Financial Affairs LPA gives you the authority to make decisions about the Donor\u2019s property and finances if they lack capacity.<\/p>\n<p>&nbsp;<\/p>\n<h2>Making decisions as a Property and Financial Affairs Attorney<\/h2>\n<p>The LPA should be reviewed by the Attorney as soon as it is received since it may provide helpful instructions and restrict the choices that Attorneys may make on the Donor&#8217;s behalf.<\/p>\n<p>The Attorney must encourage the Donor to make decisions as independently as feasible. The Attorney may make a choice for the Donor if they believe they lack the mental ability to do so at the time the decision must be made.<\/p>\n<p>The Property and Financial Affairs LPA does not authorise attorneys to decide on the donor&#8217;s welfare or health, including what medical care they should get or where they should live.<\/p>\n<p>The decisions a Property and Financial Affairs Attorney can make include the following:<\/p>\n<ul>\n<li>Buying and selling property<\/li>\n<li>Opening, closing and operating a bank account<\/li>\n<li>Dealing with tax affairs<\/li>\n<li>Claiming benefits<\/li>\n<li>Arranging and managing investments<\/li>\n<li>Paying bills<\/li>\n<\/ul>\n<p>The Donor can decide whether the LPA can be used as soon as it\u2019s registered or once the donor has lost mental capacity.<\/p>\n<p>If the Donor has the capacity to make financial decisions, you can only use the LPA if they ask you to. You will be able to act for the donor for the rest of their life (as long as the LPA is not cancelled or revoked by them).<\/p>\n<p>&nbsp;<\/p>\n<h2>Making decisions jointly and\/or severally<\/h2>\n<p>Donors can decide that their Attorneys must make decisions jointly with someone else or jointly and severally. Making choices jointly requires the unanimous consent of all attorneys, but making decisions jointly and severally allows for both group decision-making and individual attorney decision-making.<\/p>\n<p>If the Attorney is designated to act with another individual, they might need to:<\/p>\n<ul>\n<li>Deal with all matters together (jointly appointed)<\/li>\n<li>Act together or independently (jointly and severally)<\/li>\n<li>Make some decisions together and some independently (a hybrid appointment)<\/li>\n<\/ul>\n<p>It is important to note that you cannot delegate your responsibilities to a person who is not an attorney; the appointment is personal to you.<\/p>\n<p>&nbsp;<\/p>\n<h3>Following the Principals of the Mental Capacity Act 2005 and Code of Practice<\/h3>\n<p>When Attorneys make decisions, they must follow the decisions set out in the Mental Capacity Act 2005 and have regard to its Code of Practice. This means that:<\/p>\n<ul>\n<li>The Attorney must assume that the Donor can make their own decisions unless it is established that they cannot do so because they lack mental capacity<\/li>\n<li>The Attorney must help the Donor to make as many of their own decisions as possible<\/li>\n<li>The Attorney must not treat the Donor as unable to make the decision in question unless all practicable steps to help them do so have been made without success<\/li>\n<li>The Attorney must not treat the Donor as unable to make the decision in question simply because the Donor wishes to make a decision the Attorney deems unwise<\/li>\n<li>Before Attorneys make the decision in question or act for the Donor, they must consider whether they can make the decision or act in a way that is less restrictive of the Donor\u2019s rights and freedom but still achieves the purpose.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>What are the Donor\u2019s best interests?<\/h3>\n<p>If the Donor lacks the mental capacity to make a decision, then you must act in their best interests. This means that the Attorney should consider\u00a0all of the relevant circumstances, and in particular:<\/p>\n<ul>\n<li>The likelihood of the Donor recovering in the foreseeable future and being able to make the decision in question<\/li>\n<li>The Donor\u2019s past and present wishes and feelings<\/li>\n<li>The Donor\u2019s beliefs and values that would be likely to influence their decision if they had the mental capacity; and any other facts that the Donor would be likely to consider if they were able to do so<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>Involve the Donor in the decisions as far as practical<\/li>\n<li>If appropriate, consult with anyone who has an interest in the Donor\u2019s welfare<\/li>\n<li>If possible, to try and achieve the outcome that the Donor would want<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>Instructions and preferences<\/h3>\n<p>Attorneys must follow the restrictions and preferences included in the LPA; if they exceed the authority that the LPA gives, they may be removed as Attorneys.<\/p>\n<p>Attorneys should apply to the Court of Protection if the LPA restricts what they can do, and they need a wider authority to act in the best interests of the Donor.<\/p>\n<p>When the Attorney begins to act, they should consider:<\/p>\n<ul>\n<li>Any instructions that the Donor included in the LPA<\/li>\n<li>Any preferences that the Donor has included in the LPA<\/li>\n<li>Helping the Donor make their own decisions as much as they can<\/li>\n<li>Only making decisions that would be in the best interests of the Donor<\/li>\n<li>Respecting the Donor\u2019s human and civil rights<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>Limits on making gifts<\/h3>\n<p>Attorneys are able to make limited gifts on \u2018customary occasions\u2019, such as religious festivals, birthdays or weddings, provided it is to a friend or relative of the Donor. Attorneys are also able to make charitable gifts on the Donor\u2019s behalf. However, in all cases, the size of the gift must be reasonable in the circumstances. Large gifts or gifts for tax planning purposes will need the authorisation of the Court of Protection, and legal advice should be sought for this. Specific guidance can be found in the Office of the Public Guardian\u2019s \u2018<a href=\"https:\/\/www.gov.uk\/government\/publications\/public-guardian-practice-note-gifts\">Gifts: Public Guardian Practice Note<\/a>.\u2019<\/p>\n<p>&nbsp;<\/p>\n<h3>Managing finances<\/h3>\n<p>All banks and financial institutions will have different ways of dealing with Attorneys. Whilst some will allow Attorneys to continue to operate the Donor\u2019s account, others will want them to open a new account.<\/p>\n<p>There is the option of setting up an online \u2018Use a lasting power of attorney\u2019 account. This makes it easier for you to prove to financial institutions that you are an attorney under a valid LPA: <a href=\"http:\/\/www.gov.uk\/use-lasting-power-of-attorney\">www.gov.uk\/use-lasting-power-of-attorney<\/a> You should expect to have to provide your ID to each bank\/building society that you approach on the Donor\u2019s behalf.<\/p>\n<p>Attorneys should consider taking independent financial advice on how best to invest any funds belonging to the Donor.<\/p>\n<p>&nbsp;<\/p>\n<h3>Keeping accounts<\/h3>\n<p>The LPA may include a condition that you prepare and produce accounts\/financial statements. However, even if the LPA does not specify this, the Attorney still has a duty to keep accounts. It is advisable to keep financial statements and receipts as The Office of the Public Guardian could ask you to account for any dealings with the Donor\u2019s money.<\/p>\n<p>&nbsp;<\/p>\n<h3>Reimbursement of personal expenses<\/h3>\n<p>As an Attorney, you are not permitted to be paid to act except if the Donor has explicitly approved this in the LPA. Assuming that there is no arrangement in the LPA, Attorneys can request the Court of Protection to approve payments.<\/p>\n<p>Attorneys can recover reasonable out-of-pocket expenses, however, in most cases, it is unlikely to exceed more than a few hundred pounds a year. Out-of-pocket expenses include costs of travel, stationery, postage, phone calls and hiring professionals to do things like filling in the Donor\u2019s tax return.<\/p>\n<p>&nbsp;<\/p>\n<h3>Disclaiming appointment as Attorney<\/h3>\n<p>It is called \u2018disclaiming\u2019 if an Attorney chooses to stop acting on the Donor\u2019s behalf. To disclaim their appointment as an Attorney, they will need to fill in and send the LPA005 notification form to:<\/p>\n<ul>\n<li>The Donor if the LPA has not been registered<\/li>\n<li>The Donor and the OPG if the LPA is registered<\/li>\n<li>Any other Attorneys on the LPA<\/li>\n<\/ul>\n<p>CTT Group can be instructed to prepare this documentation if needed.<\/p>\n<p>&nbsp;<\/p>\n<h3>What happens when the Donor dies?<\/h3>\n<p>When the Donor dies, the Attorney\u2019s authority to act under the LPA ends. The death of the donor must be reported to the OPG, and the original LPA must be sent to the OPG so that they can cancel this. The Attorney will need to account to the Donor\u2019s Personal Representative for any money that they hold.<\/p>\n<p>&nbsp;<\/p>\n<h4>Want to learn more?<\/h4>\n<p>Our LPAs, Deputyship, Financial Assessments and Challenges Course covers the practical uses of LPAs in more detail. Book your place <a href=\"https:\/\/ctt-group.co.uk\/training\/\">here<\/a>.<\/p>\n<p>If you have any other questions, do not hesitate to <a href=\"https:\/\/ctt-group.co.uk\/contact\/\">get in touch with our advisors<\/a>.<\/p>\n\n\t<\/div>\n\t<div class=\"wrapper\">\n\t<\/div>\n\t<div class=\"inner-wrapper before-bg-color\">\n\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":7,"featured_media":721,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Guidance for Property &amp; Financial Affairs Attorneys - CTT Tax &amp; Trust<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ctt-group.co.uk\/tax-trust\/guidance-for-property-financial-affairs-attorneys\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Guidance for Property &amp; 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