How to produce annual accounts as an LPA attorney

As a Property and Financial Affairs attorney, you are managing assets that belong to someone else. The OPG’s role is to oversee how attorneys use that authority, and financial accounts are the primary way it can check that a donor’s money has been managed properly.

The OPG does not require you to submit accounts every year as a matter of routine. What it does require is that you keep them. If a complaint is made, if a family member raises a concern, or if the OPG decides to conduct a review, it can ask to see your accounts for any or all of the years you have acted. If you cannot produce them, that is itself a serious compliance failure, regardless of whether anything went wrong financially.

The accounts also serve your own interests. A clear annual record makes it very difficult for anyone to accuse you of misuse. The more transparent and complete your records are, the less vulnerable you are to challenge.

The OPG produces a form called PA11, which is its recommended format for attorney accounts. You do not have to use PA11 specifically, but your accounts should cover the same ground. The form is available on the GOV.UK website and is straightforward to complete once you understand what goes in each section.

PA11 is structured around an April to March accounting year, which aligns with the UK tax year. If you started acting mid-year, your first set of accounts may cover a shorter period. After that, you should aim to produce accounts for each full April to March period while you remain an attorney.

The form asks you to record opening balances, all income received, all expenditure made, and closing balances. It also asks you to list any significant assets and to confirm that you have kept the donor’s money separate from your own. Those two confirmations are important. They are not just bureaucratic formalities. Mixing finances, even accidentally, is one of the most common reasons attorneys end up in difficulty.

Income to record includes everything received into the donor’s accounts or on their behalf during the year:

• State Pension and any private or occupational pension payments
• Attendance Allowance, PIP, or other disability benefits
• Investment income, dividends, or interest from savings
• Rental income if the donor owns property that is let out
• Any one-off receipts such as insurance payouts or proceeds from selling assets

Expenditure covers everything paid out of the donor’s funds:

• Care home fees or domiciliary care costs
• Household bills, council tax, utilities if the donor still lives at home
• Food, clothing, and personal care items
• Medical costs, prescriptions, or specialist equipment
• Any gifts made on the donor’s behalf, including birthday or Christmas gifts
• Professional fees, such as solicitor or accountant charges
• Your own expenses if you are claiming reimbursement

Every significant item of expenditure should be backed by a receipt, invoice or bank statement entry. This does not mean you need to keep every supermarket receipt, but anything above a modest amount should have documentary support.

Attorneys are permitted to make gifts from the donor’s funds, but only within strict limits set out in the Mental Capacity Act 2005. Gifts are permitted on customary occasions, such as birthdays, Christmas, or weddings, and to people the donor would reasonably be expected to give to, in amounts that are not unreasonable given the donor’s overall financial position.

What attorneys cannot do is give away significant sums to family members, make large charitable donations, or use the donor’s money for gifts that the donor would not have made when they had capacity. Any gift you make should be recorded in your accounts with a note of the occasion, the recipient, and the amount. If you are in any doubt about whether a gift is appropriate, get legal advice before making it.

The attorneys who find annual accounts straightforward are almost always the ones who treat record keeping as an ongoing task rather than a year-end project. A few practical habits make a significant difference:

• Keep a dedicated folder, physical or digital, for receipts and invoices from the donor’s spending
• Download and save bank statements monthly rather than relying on online access that may lapse
• Log any significant transaction at the time it occurs, noting what it was for and why it was in the donor’s interests
• Record gifts separately, noting the occasion, the recipient, and the amount
• Set a calendar reminder in April to review the previous year and complete your accounts while the detail is still fresh

If you use a spreadsheet, keep it simple. A running log of income and expenditure by month, with a column for the supporting document reference, is enough for most purposes. What matters is that the figures are accurate, the records exist, and you can tie each entry back to a bank statement or receipt.

Failing to keep adequate financial accounts is a breach of your duties as an attorney. If the OPG investigates and finds that records are missing or inadequate, it can apply to the Court of Protection to have you removed as attorney. In serious cases, where money appears to have been misused, it can refer the matter to the police or take action to recover funds.

Even where there has been no actual wrongdoing, an attorney who cannot produce accounts is in a very weak position when challenged. The burden falls on you to demonstrate that you have acted properly. Without records, you cannot do that.