Getting a financial power of attorney set up is one of those essential pieces of life admin. More than a ‘just in case’ measure, it means that you can offload time-consuming errands and paperwork to someone you trust. But it’s also an important safety net if something does happen.

So, what does ‘financial power of attorney’ mean, exactly? Let’s take a look.

 

What is a financial power of attorney?

A power of attorney (or PoA) lets someone you trust manage your affairs when you can’t. There are two kinds:

And the one we’re talking about here:

  • A property and financial power of attorney, which lets someone make decisions about your money, property and assets.

 

Why set up a financial power of attorney?

A financial power of attorney means that you can give someone close to you (who is good with money) the legal power to take care of financial matters for you. This is incredibly useful if:

  • You have a long holiday or hospital stay in your calendar and need someone to look after things for you while you’re away
  •  You would like to prepare in case you are in an accident or develop a condition that affects your mind, like dementia

If you like, you can set up a financial PoA so that your chosen person can step in right away. If you’d rather just keep it as a safety net, you can make it so that they can only act if you lose the ability to make decisions.

 

What can you do with a financial power of attorney in the UK?

What are the responsibilities of a financial power of attorney holder? And what could they do on your behalf? Well, they can:

  • Buy or sell property
  • Arrange repairs to your home
  • Pay your rent or mortgage
  • Pay your bills or taxes
  • Manage your investments
  • Collect your pension or benefits for you

Giving someone power of attorney over finances doesn’t mean they’ll have unlimited power to do what they like. They are legally bound to act in your best interest. And you can leave instructions in your financial PoA for your attorneys to follow. This gives you control over what they can do with it.

 

How to get a financial power of attorney set up

To make a lasting power of attorney for finances, you’ll need to think about a few things:

  • Who should be your attorney(s)? You need to be able to trust them with financial matters. Choose someone who is organised and honest.
  • If an attorney can’t act, who should step in? Replacement attorneys can make decisions if a first-choice attorney is unavailable. They’re optional.
  • How should your attorneys work together? You can make it so that they have to make all or some decisions together, if you like.
  • Do you need to notify anyone? You can choose people who your attorneys have to alert before using your PoA. This helps prevent misuse.
  • Who can vouch for your state of mind? You’re only allowed to make a power of attorney if you have mental capacity. So, you need to choose an old friend, a doctor or a social worker who will vouch that you know what you are doing.
  • Do you have any requests or instructions for your attorneys? You can make hard-and-fast rules or just gentle suggestions.

With those questions answered, you can make your financial power of attorney. Here’s how:

  • Fill out the government’s property and financial power of attorney form
  • Sign it with the people you’ve chosen (in the right order)
  • Send the form to the Office of the Public Guardian (OPG) to register it (with a fee)

 

You may need help

While there’s no legal reason why you can’t draft your power of attorney yourself, mistakes can cause a lot of problems. In some cases, the wrong wording can make an PoA impossible to use.

So, it’s a good idea to get professional advice — especially if you’d like to set limits on your attorney’s powers.

Soon, Beyond will launch a guided online power of attorney service to help you make a financial PoA at home. Until then, it’s a good idea to get the form looked over by a solicitor.

 

Find out more 

If you’d like more advice on making a power of attorney for financial affairs, take a look at our overall LPA guide here.

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