Types of formal financial arrangements
If you, a family member or a friend is struggling to manage money to pay for care, you may want to consider a formal financial arrangement.
Financial arrangements allow someone else to manage your money if you lack mental or physical capacity and are unable to manage your money yourself. These arrangements could be considered if you have:
- A learning disability.
- A mental health problem.
- Dementia.
- A serious brain injury or illness.
There are different types of formal financial arrangements that may be suitable for you. These include:
- Appointees.
- Lasting power of attorneys (LPA). This page will only refer to property and financial affairs attorneys.
- Deputies. This page will only refer to property and financial affairs deputies.
Before you arrange a formal financial arrangement
Before you arrange for someone to manage your money you should consider if you have relatives or friends that are suitable and willing to have responsibility for money.
Some organisations can help you manage your money, such as a care provider or charity. We also offer a Money Management Service.
You may consider asking a solicitor for advice about formal financial arrangements. They may also be able to act as your attorney or deputy.
Appointee
If you're not able to manage your own money, an appointee will manage your Department for Work and Pensions (DWP) benefits and state pension.
They don't have access to other sources of income, such as a private pension or savings.
Only one appointee can act on your behalf. This is usually an individual, such as a friend or relative.
How to apply to become an appointee
Lasting power of attorney (LPA)
You may wish to consider setting up a lasting power of attorney (LPA) if:
- You're aged 18 or older.
- You have the mental capacity to manage your money.
- You have other sources of income, such as a private pension or capital or assets.
You can nominate one or more LPAs to help you make decisions should you lose the capacity to make decisions yourself. They would normally be a relative, friend or partner.
How to make, register or end a lasting power of attorney
Deputy
Someone can apply to be your deputy if:
- You're aged 18 or older.
- You don't have the mental capacity to manage your money.
- You have other sources of income, such as a private pension or capital or assets.
A deputy will be authorised by the Court of Protection to make decisions on your behalf. However, a deputy cannot:
- Make a will for you.
- Change an existing will.
- Use your money to give large cash gifts. However, they can make gifts that you'd usually make yourself.
- Hold any money or property in their own name on your behalf.
- Give family or friends personal information about your finances.
How to become someone's deputy