A Lasting Power of Attorney (LPA) is a legal document that most adults should make as soon as possible. Where a Will protects your family and estate once you’re gone, an LPA protects your family, estate and yourself whilst you’re still alive. As a landlord, you arguably have an even greater need for an LPA because without one your properties could be severely impacted, along with your income, pension pots and financial security. In this guide, we explain what a Lasting Power of Attorney is, what type you need as a landlord and why, and how to make one.
What is a Lasting Power of Attorney?
You may be surprised to learn that if you were ever unable to make important decisions due to illness or injury, your loved ones may not have the legal right to intervene – even if you give them permission at the time. Instead, decisions will likely be made by social services and the state. To give the people you trust the powers to handle your affairs if you ever need them to, you must make a Lasting Power of Attorney before you are deemed too ill or injured to make that decision. A Lasting Power of Attorney gives your chosen attorney(s) the power to step in and handle your affairs instantly and seamlessly in your time of need.
There are two types of LPA, each giving your attorney a different set of powers. A Health & Welfare LPA allows your attorney to make decisions regarding your day-to-day care, medical care and living arrangements; whilst a Property & Financial Affairs LPA allows your attorney to handle your finances and assets, including your bank accounts, utility bills, mortgages, insurance policies and property-related affairs.
People tend to take out both LPAs at the same time to ensure they can be fully looked after in their time of need. However, as this guide is about the landlord-specific benefits of having an LPA, we’ll be focusing mainly on the Property & Financial Affairs Lasting Power of Attorney.
Do I Need a Property & Financial Affairs LPA as a Landlord?
As we mentioned above, it’s a common misconception to assume that if you become ill or injured, your loved ones will be able to step in instantly and run your property investments and finances until you are back on your feet. The fact is, they won’t legally be able to do so for any assets, accounts, utilities, or policies that are in your sole name without going through lengthy and costly court procedures.
Bank accounts may be frozen and even your spouse could be shut out of accounts and assets he or she may rely on, which can lead to financial difficulties at what could already be a stressful time. As a landlord, important aspects of your business may be left in limbo – such as legal communication with lettings agents and tenants, rent collection, bills, repairs, mortgage and insurance policies and payments, arranging or terminating tenancy agreements, and all other aspects that may require the landlord’s permission.
So, to answer the question above, we strongly recommend that all landlords get a Property & Financial Affairs LPA in place – if you don’t, your property investments and financial future could be at risk, especially if you’re incapacitated for a long period of time. Although it’s never nice thinking of potential illnesses or injuries, they are a part of life, and therefore it’s best to be prepared. Giving people you trust the legal power to step in and keep your properties running smoothly until you’re better is a savvy way to limit any damage to your property business.
How Do I Make a Property & Financial Affairs Lasting Power of Attorney?
It’s crucially important to understand that you can only make an LPA whilst you still have the required mental capacity to do so. In other words, you must make your LPA long before any illness or injury occurs. Unfortunately, it’s not uncommon for loved ones to try and arrange an LPA after someone has become ill or injured, which is too late. In these circumstances, lengthy and costly court procedures are the only way to resolve the situation, and even then, the courts may not be able to give the same powers as an LPA. Once you’ve made your LPA, it won’t come into effect unless you need it to, so you’ll still have complete control of your affairs in the meantime.
Our team of experts over at Michael Usher Wills & Estate Planning can help you make a Property & Financial Affairs LPA. We also offer a discount when taking out a Health & Welfare LPA at the same time. You can choose one or more attorneys and you can limit the powers some of them receive if you wish. We’ll explain everything you need to know about making your LPAs, then guide you through the process and register your documents with the Office of Protection on your behalf.
The Bottom Line
There are two types of Lasting Power of Attorney, each designed to give your chosen attorney(s) a different set of powers – to enable them to look after you and your business affairs if you’re ever incapacitated. Although we recommend that all adults take out both LPAs, as a landlord, we believe it’s imperative you at least make a Property & Financial Affairs LPA. Without one, your loved ones won’t have the legal authority to step in and run your property business and financials for any assets, accounts or policies that are in your sole name. This could lead to spouses being shut out of assets and accounts they rely on, and it could negatively impact your income, pension pots, properties and financial future.
At Michael Usher Mortgage Services, we’ve been helping our local community for over 30 years! Aside from our mortgage team, we also have a Sales and Lettings office and a Wills and Lasting Power of Attorney office. Please get in touch and our friendly team of LPA experts will answer all of your questions for free. Our head office is on Frimley High Street, but we can also help you remotely via phone or video call if you’d prefer. We look forward to helping you and making sure you, your family and your properties are fully protected!
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