Top tips for effectively managing someone else's finances

Managing someone’s finances under a Power of Attorney in England and Wales is a significant responsibility.  You have a duty to act in the best interests of the donor (the person making the power of attorney) and must do everything in your power to enable the donor to make their own decisions to have input into their decision making as far as reasonably practicable.  Wherever possible, the donor should be supported to continue to live as independently as possible and wherever this is not possible, decisions should always be made in their best interests.

Here are some top tips to help you navigate this role:

  1. Review the power of attorney document carefully to understand the specific powers and limitations granted to you.  Ensure you are aware of any instructions and preferences and make sure you are aware of what financial decisions you are able to make on their behalf.
  2. Keep records: maintain detailed records of all financial transactions and decisions you make on their behalf.  Include all income, expenses and investment decisions.
  3. Always act in their best interest – avoid any conflicts of interest and self-dealing.
  4. Seek advice from professionals such as accountants and financial advisors in order to make informed decisions.
  5. Budgeting: create a budget that aligns with the person’s needs and financial resources. Take into consideration future planning as far as possible and consider any available funding or benefits that you might need to apply for on their behalf.
  6. Regular reporting: keep the donor informed about their own financial position and provide them with updates and financial statements where appropriate. 
  7. Safeguard assets – protect their assets from misuse or fraud. Regularly check bank account statements for any suspicious activity.  This includes checking a co-attorney’s activity and monitoring their actions in relation to the donors funds.
  8. Keep personal funds and the donor’s funds separate – never co-mingle funds.
  9. Check the Will to make sure that any specific gifts are not sold or given away prior to death.
  10. Seek legal advice if you are concerned about any aspect of your responsibilities and keep good records including all financial documents, bills, receipts, contracts etc.

Remember your primary duty is to act in the best interests of the person who granted the power of attorney and to manage their finances responsibly and ethically.

If you are considering making an LPA; or if you are manging someone else’s finances or are thinking of accepting a request to be an attorney and would like some guidance or specific advice. Please do get in touch.  We are here to help.