What Are Lasting Powers of Attorney And How Do They Work?

Having the peace of mind that someone is ready to step in and manage your affairs if you’re unable to do so is extremely important to many people.

A Lasting Power of Attorney (LPA) is a legal document that enables you (the ‘Donor’) to appoint one or more people (the Attorney(s)) you trust to make decisions on your behalf.

This can either be because you are no longer able through mental incapacity or accident, or because you want someone to help you with your finances while you’re in hospital or abroad.

Most people assume that if you’re married or in a civil partnership your spouse will automatically be able to take charge of your finances and make decisions about your medical care if you’re no longer able.

This is wrong. Without an LPA in place they won’t have the authority to do so.

The two types of LPA are: 1) Health and Welfare LPA; 2) Property and Financial Affairs LPA. You can make one or the other or choose to have both.

 

Health and Welfare Lasting Power of Attorney

As the title suggestions, this LPA gives your nominated attorney or attorneys the power to make decisions about key elements of your care.

This can include medical treatment, care home selection and even day-to-day things like food and washing. This LPA only comes into force when you can no longer make your own decisions due to mental incapacity.

 

Property and Financial Affairs Lasting Power of Attorney

In the same way that a Health and Welfare LPA allows your attorney to take charge of your health, a Property and Financial Affairs LPA enables them to make decisions about your house and money.

The fundamental difference though is this type of LPA can be used as soon as it’s registered and is not dependent on your mental capacity.

For example, if you’re planning to spend an extended period abroad you might choose to set up a Property and Financial Affairs LPA to enable someone else to pay your bills, sell your house or collect your pension in the UK on your behalf.

This means that you can have a person in the UK who can manage all your financial affairs when you’re away. They need to keep accounts and ensure your money is kept separate from theirs.

 

Drawing Up An LPA

If you’re over the age of 18 and have to mental faculties to make financial and medical decisions yourself you can create an LPA.

The process is straightforward and you can cancel your LPA at any stage if you decide you no longer want it.

You’ll need to:

  1. Choose who your attorney is. This can be a friend or relative and you can select more than one person.
  2. Complete forms to appoint your chosen person(s) as an attorney.
  3. Register your LPA with the Office of the Public Guardian.

Drawing up an LPA doesn’t mean you immediately give up control of your finances. It’s your decision whether the LPA can be used from the time it’s written or at the point where you lose your mental capacity.

 

Ordinary Power of Attorney

There is another type of power of attorney which is purely designed to cover decisions about your financial affairs for a temporary period while you are in full control of your mental faculties. This is called an Ordinary Power of Attorney.

You decide how much power to give your attorney. For example, you may just want them to be able to pay your bills, but not have any control over your property.

An Ordinary Power of Attorney is only valid while you have your mental faculties. If you want your attorney to help when you are no longer able to make your own decisions you should set up a Lasting Power of Attorney.

 

Enduring Power of Attorney (EPA)

This was replaced with Lasting Powers of Attorney in 2007. Only EPAs signed before this date are legal.

 

Get in touch

We can offer advice and help on drawing up your Lasting Power of Attorney in Wokingham, Berkshire, Reading, Surrey, Hampshire and across the South East.

For an informal, no obligation chat about your needs please email contact@familyestateplanning.co.uk or call 07984 013533.