What/when can you use Financial LPA

[charlie10]

If you have LPA, and there are no special restrictions placed by the donor, and it starts from the word go (ie don't have to wait till loss of capacity) can the attorney sell the house even if the donor (still with capacity) objects (bearing in mind it's to fund their CH)?

I've seen it said that the attorney can 'take control' based purely on their own assessment of the donor's capacity.....but I've also seen it said that if it comes to a big decision the loss of capacity has to be assessed by solicitor/doctor etc. So now I'm confused....

 

[Louise7]

I've seen it said that the attorney can 'take control' based purely on their own assessment of the donor's capacity

The wording on the financial LPA is very clear. It states that the donor can give the attorneys permission to make decisions on their behalf 'as soon as the LPA is registered (and also when I don't have mental capacity)'. However, it also states 'while the donor still has mental capacity the attorneys can only act with the donors consent'.

On that basis, if the donor still had mental capacity the attorneys couldn't sell the donors house unless the donor gave them permission to do so. The LPA would be open to financial abuse if the attorneys could decide for themselves whether the donor had mental capacity or not and then go ahead and make decisions that the donor objected to.

Bear in mind that capacity can fluctuate, and someone can be deemed to have capacity in relation to some decisions but not others.

 

[concerned4]

See below for guidance

SPECIFIC GUIDANCE ON EXERCISING CONTINUING POWERS OF ATTORNEY:

MANAGING THE PERSON'S FINANCES

4.1 You are not obliged to invest the person's estate for maximum profit but you must exercise at least the standard of financial management that he/she would expect.

4.2 You are not obliged to do anything which would otherwise be within your powers if doing it would, in relation to its value or utility, be unduly burdensome or expensive.

4.3 The funds and assets you are managing still belong to the granter and you should usually keep the person's finances separate from your own or anyone else's There may be occasions where the granter and attorneys have agreed in the past to keep their money in a joint bank account. It is possible to continue this. But in most circumstances attorneys must keep finances separate to avoid any possibility of mistakes or confusion.

4.4 If you abuse your position, for example by using the granter's funds for your own benefit, you may be liable to make good his/her losses. It is also possible that anyone investigating your actions may consider such use as theft or fraud and report the matter to the police or, if you are a professional person, to your supervisory body.

4.5 If you live in the same household as the granter, the use of his/her funds for household expenses that benefit you as well as the person will not count as abuse.

4.6 If you act reasonably and in good faith, and in accordance with the principles, you will not be liable for any breach of any duty of care or fiduciary duty