Power of Attorney: What You Need to Know

Danielle Houghton

Community Writer

Have you ever thought about what would happen next if your bodily faculties deserted you? What plans do you have if you suddenly lose your mental capacities? The majority of researches have concluded that one person in the UK develops dementia every three minutes.

In such a case, even though it is to pay for your medical treatments, your closest family members or your spouse cannot just walk into a bank and access your bank accounts or any other legal documents on behalf of you. This is when the power of attorney comes in. If you have already given someone the power of attorney to make decisions on your behalf, your loved ones don’t have to go through much hassle in dealing with your financial accounts or any other legal decisions related to you.

What is the Power of Attorney?

The term ‘attorney’ doesn’t necessarily specify a lawyer. Here, it is referred to an agent or a representative for whom you have given the power to make crucial financial and legal decisions on your behalf in a situation where you are mentally or physically unfit to make your own decisions. Whether to act out your interests in general or to proceed with specific responsibilities such as medical care, financial account management or asset investment, you can legally preselect someone to represent you.

Giving someone else the power to make decisions for you doesn’t mean you are giving up control over yours. You can guide them and provide necessary information regarding all your preferences and decisions beforehand, so every act is done as per your liking.

Types of Power of Attorneys

There are three types of power of attorneys.

1. Ordinary Power of Attorney (OPA)

You can give someone the ordinary power of attorney to handle your financial affairs for a short period if:

  • You are physically ill
  • You are abroad for a long time
  • You have met with an accident that has caused you physical injuries

Ordinary power of attorney is cancelled automatically if you lose your mental capacity. Therefore, if you are diagnosed with a mental health problem that would lead to mental incapacity, it is appropriate to choose lasting power of attorney over ordinary power of attorney.

2. Lasting Power of Attorney (LPA)

If you want someone to take care of your affairs for a long time or when you are mentally unfit, LPA is the ideal choice. LPA has to be registered before it is applicable.

3. Enduring Power of Attorney (EPA)

Before the 1st of October 2007, it was possible to make EPA handle your property and financial affairs and, it is not available now. However, an EPA made before the 1st of October 2007 is still valid and can be registered as well. This enables the agent the authority to manage financial and property affairs and not the personal welfare of the ‘donor’.

If you want to change from EPA to LPA, you can register an LPA while keeping your EPA.

What is Lasting Power of Attorney?

Generally known as LPA, or ‘the lasting power of attorney is a legal document through which you appoint or nominate a trusted friend or a relative to take care of your legal and financial affairs if you lose your mental capacities. To be enabled to arrange for someone else to make your decisions, you have to be both 18 years old or older and be mentally fit.

The person you are appointing in LPA is known as the ‘attorney’ while you, who appoints the agent are called the ‘donor’ or ‘grantor’. This legal authority handed over to an attorney can be either short-term or long-term according to specific circumstances.

Lasting power of attorney includes:

  1. Health and Welfare LPA
    This LPA gives your attorney the power to make decisions about your daily routines such as medical care, moving you into a care home or life-sustaining medical treatments.
  2. Property and Financial Affairs LPA
    This LPA gives your attorney the power to make decisions over your money and property that include managing your bank accounts, bill payment, collecting your pension and other benefits, or selling your properties as well. This power can be used immediately or held in readiness until necessitated, once registered with the Office of the Public.
  3. Enduring Power of Attorney
    An EPA only deals with financial and property affairs and does not affect your welfare issues.

How many attorneys can you appoint?

You can appoint one attorney or more than one to act on your behalf. If you appoint more than one attorney, they can ‘jointly’ make decisions where they both have to agree before acting it out. If they are given the authority ‘jointly and severely’, they have to make some decisions together, and some individually. As an example, you can appoint two attorneys to make your financial decisions and only one of them to make decisions over your medical requirements.

Make, Register or End a Power of Attorney

  • To Make:
    There are reliable online services to create a lasting power of attorney. You can follow the step by step guidance in answering the questions, save and print the LPA, sign and then send it to the Office of the Public Guardian for registration.
  • To Register:
    If you are wondering how much is the cost of power of attorney is, completing your LPA online is free. However, you have to pay a compulsory cost of £82 to register a Power of Attorney in England and Wales and, it is £81 in Scotland and £151 in Northern Ireland. You are allowed a reduced fee of £41 if you can provide evidence to prove that you earn less than £12,000/year.
  • To End:
    To cancel a power of attorney, you must sign a Deed of Revocation form and inform the attorney that their power to act has been revoked.

When Should I Make a Power of Attorney?

Don’t assume that your spouse or civil partner would automatically be able to make your financial and healthcare decisions on your behalf if you lose your ability to do so. Without an LPA, they will not be authorized to make decisions and would have to apply to the Court of Protection to make only a particular decision or appoint them as a ‘deputy’ or a ‘receiver’.

To avoid all these hassles, and as life throws unexpected balls at you, you have to be well prepared and make your decisions while you still can and before it is too late.