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Property and Financial Affairs LPA

Also known as: Finance LPA, Property LPA

Definition

A Property and Financial Affairs LPA is a legal document that authorizes trusted people (attorneys) to manage your money, property, and financial matters when you're unable to or choose to delegate these decisions.

This type of Lasting Power of Attorney protects you from lengthy Court of Protection proceedings if you lose mental capacity, ensuring your chosen people can handle your finances seamlessly.

What Does Property and Financial Affairs LPA Mean?

A Property and Financial Affairs Lasting Power of Attorney (LPA) is one of two types of LPA established under the Mental Capacity Act 2005. This legal document allows you (the 'donor') to appoint one or more trusted people (your 'attorneys') to make decisions about your money, property, and financial affairs. Your attorneys might be family members, friends, or professionals—whoever you trust to act in your best interests. The LPA must be registered with the Office of the Public Guardian before your attorneys can use it, a process that takes 8-10 weeks and costs £92 (from 17 November 2025). Unlike informal arrangements, a registered LPA gives your attorneys legal authority to deal with banks, HMRC, pension providers, and other financial institutions on your behalf.

Once registered, your attorneys can manage virtually all financial matters: operating bank accounts, paying bills and mortgages, collecting your pension and benefits, buying and selling property, managing investments, and dealing with tax affairs. For example, if you developed dementia, your attorney could sell your house to fund residential care fees, pay your utility bills, collect your state pension, and complete your tax return. Attorneys must always act in your best interests and follow the Mental Capacity Act Code of Practice. They have some restrictions—they can only make modest gifts on special occasions like birthdays or weddings, cannot change your will, and cannot make healthcare decisions (which require a separate Health and Welfare LPA). If needed, attorneys can employ professionals like accountants or solicitors to help manage complex financial affairs, paying for their services from your money.

A crucial feature of the Property and Financial Affairs LPA is that you choose when it takes effect. You can authorize your attorneys to start helping immediately upon registration (even while you have full mental capacity), or only allow them to act once you've lost capacity to manage finances yourself. This flexibility lets you receive help with complex financial affairs before losing capacity—unlike a Health and Welfare LPA, which only activates after capacity loss. Anyone aged 18 or over can make this LPA regardless of age or health. Without a registered Property and Financial Affairs LPA, if you lose capacity through accident, stroke, or dementia, your loved ones cannot legally access your bank accounts or manage your property—even spouses and children have no automatic rights. They would need to apply to the Court of Protection for deputyship, a process taking 6+ months and costing over £3,000, with no guarantee a family member would be appointed. The LPA remains valid for your lifetime until you die, at which point your will and executor take over.

Common Questions

"When can my attorney start using my Property and Financial Affairs LPA?" Your attorney can start using your Property and Financial Affairs LPA as soon as it's registered with the Office of the Public Guardian, even while you still have mental capacity if you give permission. Unlike a Health and Welfare LPA, you choose when it takes effect—either immediately upon registration or only after you lose capacity. This flexibility is a key feature distinguishing it from the other type of LPA.

"What can my attorney do with a Property and Financial Affairs LPA?" Your attorney can manage your bank accounts, pay bills, collect pensions and benefits, make or sell investments, buy or sell property, and employ professionals like accountants or solicitors to help. They must keep detailed records and act in your best interests. They cannot make healthcare decisions for you—that requires a separate Health and Welfare LPA.

"Can I make a Property and Financial Affairs LPA if I'm young and healthy?" Yes, anyone aged 18 or over with mental capacity can make a Property and Financial Affairs LPA, regardless of age or health. Capacity can be lost suddenly due to an accident, stroke, or illness at any age, so many people in their 30s, 40s, and 50s create an LPA as a precautionary measure alongside their will.

Common Misconceptions

Myth: My spouse or next of kin can automatically manage my finances if I lose capacity

Reality: There is no legal concept of "next of kin" giving automatic financial authority in England and Wales. Without a registered Property and Financial Affairs LPA, your spouse, partner, children, or parents cannot legally access your bank accounts, sell your property, or manage your finances—regardless of how close your relationship. They would need to apply to the Court of Protection for deputyship, a lengthy and expensive process costing over £3,000 and taking 6+ months.

Myth: A Property and Financial Affairs LPA is only needed for elderly people or those with dementia

Reality: Anyone aged 18 or over should consider making a Property and Financial Affairs LPA, regardless of age or health. Capacity can be lost suddenly at any age due to accidents, strokes, brain injuries, or unexpected illnesses. For example, a 35-year-old in a car accident resulting in a coma would need an LPA for someone to manage their mortgage payments, bills, and bank accounts. Many young professionals create LPAs as preventative planning alongside their wills.

  • Lasting Power of Attorney: The broader category of legal documents—Property and Financial Affairs LPA is one of two types of LPA.
  • Health and Welfare LPA: The other type of LPA that covers healthcare and personal care decisions, not financial matters.
  • Attorney: The person(s) appointed under the Property and Financial Affairs LPA to manage the donor's finances.
  • Donor: The person making the Property and Financial Affairs LPA who grants authority to attorneys.
  • Mental Capacity: You must have mental capacity to create an LPA; the LPA is used when capacity is lost or when you choose to delegate financial decisions.

Need Help with Your Will?

A Property and Financial Affairs LPA protects your finances during your lifetime, but your will protects your loved ones after you're gone. Both documents work together as part of comprehensive estate planning—the LPA ensures someone can manage your affairs if you lose capacity, while your will controls what happens to your estate after death.

Create your will with confidence using WUHLD's guided platform. For just £99.99, you'll get your complete, legally binding will plus three expert guides. Preview your will free before paying anything—no credit card required.

Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.