Managing your parent’s finances under a Property and Financial Affairs Lasting Power of Attorney is one of the most common, and most legally demanding, roles a family member can take on. Done properly, it is manageable. Done poorly, it can result in OPG investigation, family disputes, or worse.
This guide walks through the practical steps every financial attorney should follow, from the fundamentals of keeping accounts to how to handle tricky situations like gifts, property decisions and care home fees.
Your fundamental duties as a financial attorney
Before getting into the practicalities, it is worth understanding what the law expects of you. Acting under a Property and Financial Affairs LPA means you have a legal duty to:
- Act in your parent’s best interests at all times
- Keep their finances completely separate from your own
- Not benefit personally from your role, unless the LPA specifically allows it
- Keep accurate records of all income and expenditure
- Produce accounts if the OPG requests them
- Make decisions only within the scope of the LPA
- Follow any conditions or restrictions set out in the LPA document itself
These duties are not optional guidelines. They are legal obligations under the Mental Capacity Act 2005. Breaching them, even unintentionally, can lead to removal as attorney and, in serious cases, criminal prosecution under section 44 of the MCA.
Setting up proper financial management
The first step when you begin acting under a financial LPA is to get the administration right. This means:
Open a dedicated account if possible
If your parent does not already have a suitable bank account, or if their existing accounts are difficult to manage, consider opening an account in their name (not yours) that is used solely for their finances. This makes it immediately clear in any accounts or records that their money is not mixed with yours.
Notify relevant institutions
Banks, pension providers, the Department for Work and Pensions, HMRC, care providers and any other institutions managing your parent’s money need to know about the LPA. You will usually need to provide the original registered LPA or a certified copy. Keep a record of who you have notified and when.
Understand what money is coming in and going out
Before you can manage finances properly, you need a clear picture of the financial position. List all income sources, state pension, private pension, benefits, rental income, savings interest, and all regular outgoings. This baseline makes it much easier to spot anything unusual later on.
Keeping financial records day to day
The OPG does not prescribe a specific format for financial records, but it does expect them to be accurate, complete and able to account for all transactions. In practice, you should record:
- Every transaction, with the date, amount, what it was for, and the source or recipient
- Receipts and invoices for significant expenditure, particularly care costs, large purchases and professional fees
- Bank statements for all accounts in the donor’s name
- Investment statements if your parent holds stocks, ISAs or other assets
- Property-related documents if you are managing or selling property on their behalf
- The reasoning behind any significant financial decision
You do not need to save the receipt for every small supermarket purchase. But anything above a threshold you are comfortable justifying, and anything that could be questioned, should be documented.
Annual accounts in practice
Many financial attorneys are surprised to learn they are expected to produce annual accounts. The OPG’s PA11 form provides a standard format. It records opening and closing balances, total income, total expenditure, and lists significant assets. Even if the OPG never asks for it, completing an annual account at the end of each financial year gives you a clear record and makes it much easier to explain your management of your parent’s finances to family members or any future professional adviser.
Handling tricky situations
Making gifts
Attorneys can only make gifts from the donor’s funds in limited circumstances. Small seasonal gifts, such as birthday or Christmas presents, to people the donor has a personal relationship with are generally acceptable, provided they are reasonable in the context of the donor’s financial position. Anything beyond that, including regular financial support for family members or large one-off gifts, requires either specific authority in the LPA itself or an application to the Court of Protection.
This is one of the most common areas where attorneys inadvertently cross a line. Record any gift you make, how much it was, who it was for, and why you considered it appropriate.
Paying care home fees
Care home fees can be substantial, and managing them requires careful record keeping. Keep copies of all invoices and payment records. If you are using your parent’s savings or selling assets to fund care, record the decision-making process clearly, including any financial assessments, advice you received, and why the chosen option was considered to be in their best interests.
Property decisions
Selling a parent’s home is one of the most significant financial decisions an attorney can make. This will almost always require the involvement of a solicitor and potentially a Court of Protection order, depending on the circumstances. Document every step of the process thoroughly.
Keep your finances separate. This single principle, applied consistently, will prevent more problems than almost anything else. Even small amounts mixed between your account and theirs can look very suspicious if your records are ever reviewed.
What to do if you are unsure
Financial management under an LPA involves grey areas, and it is entirely normal to be uncertain sometimes. The right response to uncertainty is not to simply make a decision and hope for the best. It is to:
- Take professional advice from a solicitor, independent financial adviser or accountant where appropriate
- Record the fact that you sought advice, what the advice was, and how it informed your decision
- Contact the OPG itself, which has a helpline for queries from attorneys
- Consider whether a Court of Protection order is needed for a particularly significant decision
Financial record keeping made manageable
Wardly helps Property and Financial Affairs attorneys track income and expenditure, log financial decisions with reasoning, and keep everything in one place with an exportable record for the OPG.
Start your free logFrequently asked questions
Can I charge for my time as a financial attorney?
Not unless the LPA specifically includes a charging clause. Otherwise, you are expected to act without payment. You can, however, recover reasonable out-of-pocket expenses.
Do I need to involve other family members in financial decisions?
The LPA gives you the authority to act, and you do not legally need the agreement of other family members for most decisions. However, consulting them, particularly for significant decisions, is good practice and can prevent disputes. It also demonstrates that you considered others’ views, which is relevant to the best interests test.
What if I disagree with other attorneys named on the LPA?
If the LPA requires attorneys to act jointly on certain decisions, you all need to agree. If it allows some decisions to be made jointly and severally, you can each act independently. Disagreements should ideally be worked through with a mediator or solicitor rather than simply overriding one another.
Can I use my parent’s money to buy things that benefit both of us?
Only if the primary purpose and benefit is to your parent. Spending their money on something that primarily benefits you is not permitted and could constitute financial abuse. If there is any doubt, seek legal advice first.
What happens to my role when my parent dies?
The LPA ends when the donor dies. At that point, the estate passes to the executors named in the will, or is dealt with under the intestacy rules if there is no will. As attorney, your authority ceases immediately and any remaining funds must be passed to the executors.