What is power of attorney?
A power of attorney is a legal document that gives someone else the right to make decisions for you and act on your behalf. The person you choose to give this right to is called your attorney. Your attorney should be someone you trust to make good decisions and act in your best interests. You might make a power of attorney if you decide you no longer want to make decisions for yourself, or to prepare for a time when you are no longer able to.
Why might you use a power of attorney?
There are lots of reasons why you might need someone else to make decisions for you. It could be a temporary situation – for example, you might have to stay in hospital and need someone to help with paying bills.
Alternatively, you might have been diagnosed with a cognitive condition like dementia, which affects mental capacity. Mental capacity means the ability to make decisions for yourself. In this case you might choose to put long-term plans in place for someone you trust to take responsibility, if a time comes when you can no longer make decisions. Whilst it can be difficult and sad to imagine these things happening in the future, it is important to plan properly for how they might be handled.
Why is power of attorney so important?
The power of attorney (POA) is a formal, legally recognised agreement. It gives your attorney the legal authority to deal with third parties such as banks or the local council – rights that a friend or family member does not automatically have by law, even if they are someone you trust.
Some types of POA give your attorney the legal power to make big decisions for you, such as where you should live or whether you should see a doctor. These are choices that can have a big impact on your life, so appointing somebody you trust as your attorney brings you the security of knowing you will be well looked after.
No one knows what’s around the corner. By appointing a trusted attorney, you can give yourself and your loved ones peace of mind, planning for everything to be taken care of in the best way possible.
Who can be my power of attorney?
Anyone can be appointed as an attorney, so long as they are aged 18 or over and capable of making decisions. Solicitors and banks can also act as professional attorneys.
Will my attorney be paid?
Professional attorneys charge for their services. If your attorney is a friend or relative, they can claim ‘out-of-pocket’ expenses for things they do as part of their role. However, they can only get payment for carrying out their duties if you have agreed to this in advance, as part of the formal POA agreement.
What are the different types of POA?
There are three types of POA: ordinary power of attorney, enduring power of attorney, and lasting power of attorney.
- Ordinary power of attorney:
Ordinary power of attorney (OPA) can only be used in situations where you have the mental capacity to make your own decisions, but need someone to temporarily assist with financial affairs (for example if you are away on holiday or in hospital).
- Lasting power of attorney:
Lasting power of attorney (LPA) is suitable if you need an attorney to look after your affairs for a long period of time. You might put an LPA in place if you have been diagnosed with an illness which might prevent you from making decisions for yourself at some time in the future. Various illnesses can affect mental capacity, including dementia, mental health problems or brain injury.
- Enduring power of attorney:
Enduring power of attorney (EPA) is an old form of lasting power of attorney. It is no longer possible to make a new EPA. However, if an EPA was made before 1 October 2007 it can still be registered and used. EPAs that are already registered will still be valid.
More information about lasting powers of attorney
Anyone can make an LPA in case they ever lose mental capacity. You must make an LPA whilst you are still capable of making decisions for yourself (still have mental capacity).
There are two types of LPA:
- LPA for property and finance decisions
- LPA for health and welfare decisions
LPA for property and finance decisions
This type of LPA covers actions and decisions around things like paying your bills and your mortgage, investing money, buying and selling properties and arranging property repairs.
An LPA for property and finance decisions can be used whilst you still have mental capacity, if you choose to give control of these decisions to your attorney. Alternatively, you can make it so your LPA can only be used if you lose mental capacity. You can also restrict the types of decisions your attorney can make on your behalf, or you can let them make all property and finance decisions for you.
It’s important that your attorney keeps track of how they are managing your financial affairs. They must keep accounts and make sure their own money is kept separate from yours. You can ask for regular updates on how much they have spent, how much money you have, etc. These details can be sent to a solicitor or a family member if you lose mental capacity. This lets you and your loved ones know everything is being taken care of properly for you.
LPA for health and welfare decisions
This type of LPA covers decisions around your health and welfare, such as when you should see a doctor, where you should live, who you should have contact with and what kind of activities you should take part in. If you choose to, you can also give your attorney the right to make serious medical decisions about life saving treatment.
An LPA for health and welfare is only for use after you have lost mental capacity and can no longer make decisions about your own wellbeing.
How do I make a power of attorney?
To arrange a power of attorney, you need to contact the Office of the Public Guardian to get the relevant forms and an information pack. The forms can be downloaded or completed online. You can complete them yourself, or with the help of a solicitor or local advice agency (e.g. the Citizens Advice Bureau). Taking professional advice can help you to avoid problems later, especially if your affairs are complex.
A lasting power of attorney (LPA) needs to be signed by a certificate provider. This is someone who confirms that you understand the agreement and that nobody has put you under any pressure to make it. The certificate provider must be someone you have known well for at least two years, or a professional with relevant expertise (such as a doctor, social worker or solicitor).
The LPA must be registered with the Office of the Public Guardian before it can be used and a registration fee is usually payable at this time. If you are on a low income or receiving certain benefits, you may be able to get help with the cost of the fee.
You must register the LPA while you still have mental capacity. It can’t be used during the registration process, which takes about 9 weeks. If you signed the LPA while you still had mental capacity, but lose mental capacity before you can register it, your attorney can register the LPA for you.
*Ordinary power of attorney and enduring power of attorney have slightly different registration requirements. You should speak to the Office of the Public Guardian to confirm exactly what you need to do for any form of POA.
How much does it cost to set up a lasting power of attorney?
In England and Wales, the fee to register each LPA is £82. If you wanted to register both an LPA for property and financial affairs and an LPA for health and welfare, the total fee payable would be £164.
If you are on a low income, you may be eligible for a 50% discount. If you are receiving certain income related benefits, there may be no charge at all.
How many attorneys can I have?
You can appoint more than one attorney if you want to. This can work in two different ways:
- Your attorneys are appointed as joint attorneys. This means they must always act together; a single attorney cannot make decisions on your behalf. This makes it harder for an attorney to do anything that is not in your best interests. However, if one attorney dies or loses mental capacity then the POA will legally end.
- Your attorneys are appointed to act together and independently (also known as joint and several attorneys). This means that the decision or action of a single attorney is as valid as if they were the only attorney. It also means that the POA will continue in force if anything happens to one of the attorneys.
You might choose to set up your POA so that attorneys must act jointly for some decisions (e.g. serious medical decisions) but can act jointly and severally on all other decisions. You can also appoint replacement attorneys, who would step in if anything happened to your original attorneys.
What happens if I don’t have a POA?
If you reach the point where you need someone to act on your behalf, you need to have a POA in place to be sure that things will be dealt with in the ways you want. Without this, there are no guarantees about what will happen. It may seem logical that if you are married or in a civil partnership, your spouse would be able to deal with your finances and make decisions about your healthcare, if you lose the ability to do so. This is not the case – without an LPA, they would not have the authority.
If you lose mental capacity at the time a decision needs to be made and you haven’t made a POA, then a court can appoint someone to be your deputy. A deputy is someone who, like an attorney, takes over your decisions for you when you don’t have the mental capacity to make them for yourself. But, whilst a friend or family member could apply to be your deputy, you have no control over who the court chooses to appoint, or the level of power the deputy has in your affairs. This might mean that your deputy ends up making decisions on your behalf about things you wouldn’t want them involved with. Your family could also end up paying unnecessary costs to maintain the deputyship.
Bearing all of this in mind, you can see why it is important to plan for your future with a carefully set out power of attorney.