Power of Attorney
A Power of attorney allows an individual to make decisions on your behalf, or act for you, if you can no longer act for yourself, or you no longer wish to make your own decisions.
Reasons you may no longer wish to make your own decisions or can no longer act for yourself include:
- A temporary situation may arise if you are hospitalised and need assistance with everyday tasks, such as paying bills.
- If you have been diagnosed with dementia, for example, or have a long-term illness that causes you to lose your mental capacity and it restricts your ability to make decisions in the future.
Mental capacity is the ability to communicate or make decisions at the time they need to be made. In order to have mental capacity, you must be able to understand the decision you are required to make, why it needs to be made, and the likely outcome of your decision.
Some people are able to make decisions about some things, but struggle with others. For example, you may be perfectly able to decide what to eat for lunch but cannot understand and arrange your household insurance. Some people may find their ability to make decisions varies from day-to-day.
If you need more time to communicate or understand, it doesn’t automatically mean you lack mental capacity. Having dementia does not necessarily mean that someone cannot make decisions for themselves, and attempts should always be made to overcome those difficulties and assist them to decide for themselves.
Different types of power of attorney
Ordinary power of attorney
This is valid while you have mental capacity and covers decisions about your financial affairs. It is suitable when temporary cover is needed, such as a stay in hospital or to deal with your affairs whilst on holiday. If you find it difficult to get out and about, or want someone to act for you, then ordinary power of attorney will be suitable for you.
One or more people can hold an ordinary power of attorney and, once appointed, will make financial decisions on your behalf. It is only valid whilst you have the mental capacity to make your own decisions and you can limit the power you give your attorney so they can only deal with certain assets. For example, they are allowed to deal with day-to-day finances, but cannot deal with anything to do with your home, such as putting it on the market.
If you want someone to act on your behalf in preparation for a time when you don’t have the mental capacity to make your own decisions, you should think about setting up a lasting power of attorney.
Lasting power of attorney (LPA)
This covers decisions about your health and care, including your financial affairs. It comes into effect if you lose mental capacity, or if you no longer want to make decisions for yourself. An LPA can be set up in advance and kicks in when you either lose mental capacity or no longer wish to make decisions.
There are two types of LPA:
- LPA for health and care decisions
- LPA for financial decisions
LPA for health and care decisions
This can only be used once you have lost mental capacity. Your attorney can make decisions, such as:
- Where you should live
- Your medical care
- What you should eat
- Who you should have contact with
- They type of social activities you can take part in
You can also make provisions within the LPA and give special permission for your attorney to make decisions about life saving treatment and end-of-life care.
LPA for financial decisions
This can be used whilst you still have mental capacity, or alternatively, you can state that you only want it to come into force if you lose mental capacity. An LPA for financial decisions includes:
- Paying the mortgage on your home
- Buying and selling your home/other property you own
- Investing money
- Paying bills
- Arranging repairs to your home/other property
You can restrict the types of decisions within the LPA or allow all decisions to make on your behalf. Your appointed attorney must keep accounts and ensure their personal money is kept separate from yours. You can request regular updates and details of how much is being spent and how much money is left. If you lose mental capacity, these details can be sent to a solicitor or family member, which offers an extra layer of protection.
Enduring power of attorney (EPA)
LPAs replaced these in October 2007. However, if you made and signed an EPA prior to 1st October 2007, it will still be valid. EPAs cover decisions around financial affairs and property, and come into effect if mental capacity is lost, or if that person wishes someone else to act on their behalf.
It is important to note that even if you are married or in a civil partnership, your spouse or civil partner cannot legally deal with your financial affairs and make decisions about your healthcare without an LPA. An LPA will give them the authority to do so.
Setting up a power of attorney
If you are considering setting up a power of attorney, it is sensible to obtain specialist legal advice as to the potential implications, although you can download the forms from the gov.uk website and do it yourself.
The stages of setting up a power of attorney are as follows:
- Contact the Office of the Public Guardian to obtain an information pack and the relevant forms. As stated above, you can download the forms or fill them out online.
- Complete the forms either yourself, or with the assistance of a solicitor or local advice agency. Taking advice can help prevent problems further down the line, particularly if you are unsure about the process or your financial affairs are complex.
- Your completed LPA must be signed by a certificate provider. This is someone who confirms you understand the implications of the LPA and that you have not been put under any pressure to sign it. The certificate provider can be someone you know well, or a professional person, such as a solicitor, doctor, or social worker.
- The LPA must be registered with the Office of the Public Guardian before it becomes operational. There is a registration fee of £82, or £164, to register for both an LPA for health and care and property and financial affairs. However, for those on a low income, they may be eligible for a 50% discount. And there is no fee payable for those in receipt of certain benefits. The LPA must be registered whilst you still have mental capacity and cannot be used during the registration process, which generally takes around 9 weeks. If mental capacity is lost after the LPA has been signed, the attorney or your solicitor can register it for you.
Changing a power of attorney
Generally speaking, you cannot change an LPA after it has been registered. If you are having problems or you are unhappy with decisions being made for you, you should initially raise any concerns with the Office of the Public Guardian, who are responsible for monitoring attorney’s and can investigate allegations of fraud or mistreatment. It can also report concerns to other agencies, such as the police or social services, if necessary.