7-minute read

What is a Lasting Power of Attorney and do I need one?

A Lasting Power of Attorney (LPA) is a document that allows your family or friends (attorney(s)) to legally make decisions on your behalf when you are not able to. Considering they last a lifetime, they are well worth the investment to empower you and protect your family. People often say, ‘my family would know what to do’ but this puts pressure on them during an often stressful time, and ultimately without an LPA key decisions might be taken out of their hands.

This is becoming more and more important as we are living longer.

In everyday life having an LPA is a powerful way for you to have a voice when important decisions need to be made. People sometimes assume that LPAs are just for the older generation or for people who have an illness such as Alzheimer’s or Dementia and have lost the mental capacity to make their own decisions according to the Mental Capacity Act. This is not the case. These documents are something that everyone should put into place to protect themselves from the unexpected.

There are two types of documents, one for Property and Finance and one for Health and Welfare. They are both equally as important as each other. This article covers different options to help you choose which would be the right type for you.

  1. Property and Finance Lasting Power of Attorney

The Property and Finance document allows the people you nominate to make decisions relating to your financial affairs. This document can be used as soon as it is registered and can be beneficial for dealing in the long term with your bank account, or if you are on holiday and need something specific dealing with in the UK. LPAs have been particularly useful throughout the coronavirus pandemic.

For example, this LPA could help you in terms of paying bills, going to the bank, dealing with specific transactions or talking to organisations on the phone about your finances. Once registered, your attorneys can make decisions on your behalf straight away. This does not mean that if you still have capacity, decisions regarding your finances will be out of your hands.

Importantly, this LPA gives you control as your attorneys can only make these decisions with your authority whilst you still have capacity.

For example, many of our clients are in lock down or quarantining themselves. Having an LPA document means their finances can be dealt with even when they are not able to leave the house.

What happens if I don’t have the Property and Finance LPA?

Without this document all access to your finances would be denied should you lose capacity. A joint signatory on a bank account would not be enough to allow access – the account would be frozen. This means that issues can arise where bills are being paid from a specific account.

If access to the account is needed and there is no Power of Attorney in place your family or friends would need to apply to the court of protection for a deputyship order. This can be expensive and is a lengthy process involving court fees and ongoing costs to keep up the order. By putting the Property and Finance LPA in place it prevents putting your family into this stressful situation.

If something happens down the line and you decide that you do want to put this type of LPA place, it may be too late. Unfortunately, we do not know what is around the corner and a loss of capacity can come from any event such as a car crash or even falling over.

I have an Enduring Power of Attorney (EPA). Can this still be used?

EPAs, which only cover property and finance not your health, were in place before the current system and can no longer be created. However, if they were made and signed correctly before 1st October 2007 they can still be used. If you are unsure, please ask a legal expert to check for you sooner rather than later.

If you have specific wishes regarding your health and are worried about losing capacity in a short space of time then protect yourself by putting in place both the Property and Finance and Health and Welfare LPAs instead.

An EPA would not allow the people you nominate to make decisions regarding your health, which is one reason why many people with this type of PoA have ‘upgraded’ to both types of LPA.

If your EPA was signed before 1st October 2007 and needs to be used, it will still be valid. Although legally, EPAs can be used before they are registered with your authority, many banks and companies are not trained about the details and will still freeze your finances if they believe that capacity is an issue. This also means that they are open to abuse as they can be used pre-registration.

Mental capacity would be determined by a doctor and is likely to already be a stressful time on top of having no access to your finances. During the registration process, which can take up to 12 weeks, finances will not be accessible. In contrast, the LPA is registered immediately so that it is ready to be used.

I have heard of Ordinary Powers of Attorney (OPA). What do they do?

OPAs are used on a temporary basis and can only be used whilst you still have capacity. They have been particularly valuable during the coronavirus pandemic.

An OPA can only deal with your Property and Finance and cannot be used to make decisions regarding your health. These documents do not need to be registered at the Office of the Public Guardian and therefore can be used as soon as they are signed.

OPAs can be used temporarily during Covid-19 whilst you are waiting for your Property and Finance LPA to be registered. It is recommended that if you are using an OPA that you also put a Property and Finance LPA into place.  OPAs can also be used before going on holiday or for other short-term use such as recovering from an injury.

Our advice is to put an LPA in place now. You can then have control and peace of mind, knowing that you and your family are protected by documents which can be be used as soon as they are needed.

  1. Health and Welfare Lasting Power of Attorney

The Health and Welfare document is arguably the more personal one which can be used on a temporary or longer-term basis. This document can only be used once capacity is lost but as with the Property and Finance LPA, it is registered now so that it is ready to be used when it is needed.

It looks at the social element of your life and allows the people you nominate to make decisions about:

  • medical treatment you may need (specifically life sustaining treatment)
  • decisions about care homes (location, routine, diet etc).

Many of my clients have very personal wishes with regard to not being kept alive when their quality of life is going to be poor. This type of LPA allows their voice to be heard when they may not have had the opportunity to ask for what they want.

As an example in the short-term, if you were having an operation and lost capacity for a month, this LPA could be used. Once capacity is restored they are put to one side until they are needed again.

What happens if I don’t have a Health and Welfare LPA?

Without this LPA these important decisions lie in the hands of the doctors or the local authority.

In many situations doctors have a duty to preserve life even if it is not necessarily the kindest thing to do – which might go against what you or your family would want. This document allows you to nominate people to make these decisions instead of the doctors.

A lot of my clients say that their children would know what they want and would make these decisions for them. Unfortunately, such decisions are usually out of their hands. Only this document allows your voice to be heard once you have lost capacity.

Again, if this document is not put into place and your situation changes and you decide that you need it, it may be too late.

This document can only be created whilst you still have the capacity to do so.

Unfortunately the current Covid-19 situation highlights the uncertainty of everyday life. We strongly recommend that people put an LPA in place now to be protected by having the documents ready as and when they are needed.

In summary, what protection does each Power of Attorney offer you?

Lasting Power of Attorney – Property and Finance:

  • Use with or without capacity
  • Used in the long term
  • Finances dealt with by people you trust
  • Peace of mind
  • Registered at the Office of the Public Guardian when made

Lasting Power of Attorney – Health and Welfare:

  • Only used once capacity is lost
  • Used in the long term
  • Health decisions in the hands of people you trust
  • Peace of mind
  • Registered at the Office of the Public Guardian when made

Enduring Power of Attorney:

  • Can be used before being registered with your authority
  • Must be registered at the Office of the Public Guardian when you are ‘losing’ capacity
  • Only deals with your finances

Ordinary Power of Attorney:

  • Can only be used whilst you have capacity
  • Used in the short term
  • Only deals with finances
  • Does not need to be registered

I hope  this information has provided the details you are looking for and if you would like to talk through your options, our friendly team offers a free conversation. Please contact us by email or by phone.

Thank you to the author, Ceri Burns.