What is a Power of Attorney?
A Power of Attorney is a legally-binding document that allows someone to make decisions for you, or act on your behalf, if you are no longer able to, or if you no longer want to make your own decisions.
It is always worthwhile considering these matters while one is in good health, and taking the opportunity to discuss your preferences with your loved ones. If you decide to put in place a Power of Attorney, please do inform your loved ones, and satisfy yourself that the ‘Attorney’ you have appointed is trusted, and of good character.
Why should I have a Power of Attorney?
It is useful to consider putting in place a power of attorney (e.g. for health matters or for your financial affairs) in order to safeguard your interests in the event that you are unable to look after your own affairs and are unable to make decisions for yourself.
There are a number of reasons why you might need someone to make decisions for you or act on your behalf:
This could just be a temporary situation: for example, if you are in hospital and need help with everyday tasks such as paying bills.
You may need to make longer-term plans if, for example, you have been diagnosed with dementia or other debilitating illness which means that you may lose the mental capacity to make your own decisions in the future.
What is mental capacity?
Mental capacity means the ability to make or communicate specific decisions at the time they need to be made.
To have mental capacity, you must understand the decision you need to make, why you need to make it at that point in time, and the likely outcome of your decision.
Some people will be able to make decisions about some things but not others.
For example, they may be able to decide what to buy for dinner, but be unable to understand and arrange their home insurance. Alternatively, their ability to make decisions may change from day to day.
Needing more time to understand or communicate does not mean you lack mental capacity. For example, having dementia doesn't necessarily mean that someone is unable to make any decisions for themselves. Where someone is having difficulty communicating a decision, an attempt should always be made to overcome those difficulties and help the person decide for themselves.
What happens if I do not have a Power of Attorney when I have lost mental capacity?
If you lose mental capacity and do not have a Power of Attorney then the Court of Protection will need to be involved so that your affairs can be handled on your behalf.
Different types of Powers of Attorney
There are different types of power of attorney and you can set up more than one. In the section below, we explain the differences between the available Powers of Attorney, and provide some resources for further information.
1. Ordinary Power of Attorney
This covers decisions about your financial affairs and is valid while you have mental capacity. It is suitable if you need cover for a temporary period (hospital stay or holiday) or if you find it hard to get out, or you want someone to act for you.
You can limit the power you give your attorney so that they can only deal with certain assets, for example, your bank account but not your home.
An ordinary Power of Attorney is only valid while you have the mental capacity to make your own decisions. If you want someone to be able to act on your behalf if there comes a time when you do not have the mental capacity to make your own decisions you should consider setting up a lasting power of attorney.
2. Lasting Power of Attorney (LPA)
An LPA covers decisions about your financial affairs, or your health and welfare. If you lose mental capacity, or if you no longer want to make decisions for yourself in the future, an LPA can enable someone you trust to make those decisions for you (see further below for more detail).
3. Enduring Power of Attorney (EPA)
An EPA is similar to an LPA, but since 2007, these have been discontinued.
If you made an EPA before 2007, the document is still perfectly valid and can still be used as long as it is properly registered.
An EPA covers decisions about your property and financial affairs, and it comes into effect if you lose mental capacity, or if you want someone to act on your behalf.
Lasting Powers of Attorney (LPA)
There are two types of LPAs:
1. Property and Financial Affairs LPA
A Property and Financial Affairs Lasting Power of Attorney enables a person (called the Donor) to appoint another person (called an Attorney) to deal with matters and make decisions relating to their financial affairs and property.
These can include decisions about bank accounts, savings and investments, collecting pensions and other income, paying bills and outgoings and even selling property.
The Property and Financial Affairs Lasting Power of Attorney can be used by a person’s Attorney when the Donor still has mental capacity and also when the Donor does not. Although if the Donor wishes, they can request that it be restricted and that it is only for use if the Donor does not have mental capacity.
2. Health and Welfare LPA
A Health and Welfare Lasting Power of Attorney enables a person (the Donor) to appoint another person (an Attorney) to deal with and make decisions relating to your health and personal welfare.
These include decisions about medical treatment, accepting or refusing certain types of health care, decisions about life sustaining treatment, your diet, the clothes you wear, your daily routine, such as shopping and even whether you should go into a care home and the location of it.
PROPERTY AND FINANCIAL AFFAIRS LASTING POWER OF ATTORNEY
WHY MAKE A PROPERTY AND FINANCIAL AFFAIRS LASTING POWER OF ATTORNEY?
You may at some stage in your life struggle to deal with your property and financial affairs either due to physical or mental difficulties. Physical reasons include you struggling to carry out certain tasks because of difficulties such as walking any distance, talking over the phone or being hard of hearing. This includes being out of the country for periods of time. Mental health reasons could include starting to become forgetful and not remembering things so easily or becoming confused with certain matters. You may develop problems such as Alzheimer’s disease or some other mental health condition and that could result in you possibly losing your mental capacity.
WHAT PROPERTY AND FINANCIAL AFFAIRS LASTING POWERS OF ATTORNEY CAN DEAL WITH
Property and Financial Affairs Lasting Powers of Attorney can deal with all aspects of your financial affairs including:
Handling your bank accounts and savings
Buying and selling (including your home)
Paying bills, including care home fees
Closing down and winding up a business
Other financial matters
HEALTH AND WELFARE LASTING POWER OF ATTORNEY
WHY MAKE A HEALTH AND WELFARE LASTING POWER OF ATTORNEY?
You may at some stage in your life struggle to deal with your property and financial affairs either due to physical or mental health difficulties. Physical reasons include you struggling to carry out certain tasks because of physical difficulties such as walking any distance, talking over the phone or being hard of hearing. This includes being out of the country for periods of time. Mental health reasons could include you starting to become forgetful and not remember things so easily or become a little confused with certain matters. You might even develop problems such as Alzheimer’s disease or some other mental health condition and that could result in you possibly losing your mental capacity.
WHAT HEALTH AND WELFARE LASTING POWERS OF ATTORNEY CAN DEAL WITH
Health and Welfare Lasting Powers of Attorney can deal with all aspects of your health and personal welfare matters including:
Making decisions about medical treatment
Accepting or refusing certain types of health care
Decisions about life sustaining treatment
Your diet
The clothes you wear
Your daily routine, such as shopping; even whether you should go into a home
WHY MAKE A LASTING POWER OF ATTORNEY?
WHAT ARE THE BENEFITS?
By making a Lasting Power of Attorney you can ensure that you choose the right person to look after you, and make sure your personal and financial affairs are protected and sorted out by those who you trust. Furthermore, no-one else would be able to take advantage of your disability or ill health, and therefore it would only be the people who love and care for you that are the ones who will have control and access to your finances and property.
REASONS TO MAKE A LASTING POWER OF ATTORNEY
There are various reasons to make a Lasting Power of Attorney including the following:-
- Your wishes are respected – Decisions concerning your finances and personal affairs will not be left to the Court or some stranger
- Protection guaranteed- as you get older the risks of developing Alzheimer’s Disease, or being unable to look after your own affairs increases. Sometimes things happen suddenly and quickly, such as a stroke. A Lasting Power of Attorney can be similar to a lifelong insurance policy to protect you.
- Avoid court of protection involvement– if at some point in the future you are unable to handle your financial or personal affairs and have not made a Lasting Power of Attorney then it is likely that an application to the Court of Protection would need to be made. This is time-consuming and an awfully expensive process.
- Peace of mind- having a Lasting Power of Attorney with your affairs in order will give you peace of mind.
1. Contact the Office of the Public Guardian to get the relevant forms and an information pack. You can download the forms or fill them out online. https://www.gov.uk/government/publications/make-a-lasting-power-of-attor....
2. You can fill out the forms yourself, or with the help of a solicitor or local advice agency. Taking professional advice can prevent problems later, especially if you are unsure of the process or your affairs are complex.
3. Have your LPA signed by a certificate provider. This is someone who confirms that you understand it and have not been put under any pressure to sign it. The certificate provider must be someone you know well or a professional person such as a doctor, social worker or solicitor. There may be a fee for this.
4. The LPA must be registered with the Office of the Public Guardian before it can be used. There is a fee of £82 to register each LPA. If you are on a low income, you may be eligible for a 50% discount, and if you are receiving certain benefits you may not have to pay anything at all. You must register your LPA while you still have the mental capacity and it cannot be used during the registration process which takes about 9 weeks. If you lose mental capacity but signed the LPA while you still had mental capacity, your attorney can register it for you.
How much does it cost to set up a lasting power of attorney?
You will need to register the LPA before you can use it. In England and Wales, the registration fee is £82 for each LPA – so it costs £164 to register both an LPA for property and financial affairs and an LPA for health and welfare.
You may be exempt from paying the fee if you are on a low income or you receive certain income-related benefits.
WHAT IF YOU HAVE NOT MADE A LASTING POWER OF ATTORNEY?
LOSS OF CONTROL OVER YOUR FINANCES AND PERSONAL AFFAIRS
If there is a deterioration in your physical or mental health and you then struggle or are unable to make decisions in relation to your finances or personal affairs, then this can cause difficulties and problems for yourself and your family and it can become very challenging to do anything out on your behalf.
COURT OF PROTECTION
If you lack mental capacity to make financial decisions, then it may be necessary for an application to be made to the Court of Protection for an appropriate order, such as appointing another person to make decisions on your behalf. This is both very expensive and time consuming.
To avoid potential disputes in the future, you can give a person(s) authority to make those decisions on your behalf by making a Health and Welfare Lasting Power of Attorney.
OFFICE OF THE PUBLIC GUARDIAN
The Court of Protection is a Superior Court created under the Mental Capacity Act 2005. It protects the property, financial affairs and personal welfare of people who lack the mental capacity to make decisions for themselves. The Court of Protection works closely with the Office of the Public Guardian; with the latter completing more administrative tasks such as issuing a Power of Attorney.
DISPUTES
If there are disputes regarding a Lasting Power of Attorney, then the issue should be directed to the Court of Protection. Furthermore, if an individual does not have a Lasting Power of Attorney to direct who should deal with their affairs, and they subsequently lose their mental capacity, the only way in which a family member or close friend can make decisions on their behalf is to apply to the Court of Protection. This method is ultimately used to ensure that individuals are not taken advantage of when at their most vulnerable.
APPENDIX
This case study is based on real events. In order to protect the identity and confidentiality of the individuals, names have been altered.
Mr and Mrs X lived alone, they had no children and no next of kin. They lived in a beautiful home and led a comfortable life. They loved their home and always said to each other they would like to see out their days in their own home. They were in their seventies and were fit and well.
On a walk together to their local post office, they both were involved in a fatal car accident, which caused Mr X to die instantly and Mrs X suffered severe head injuries, a broken hip and internal bleeding. The hospital ward team identified that she needed a high level of care and support package because Mrs X had suffered a subdural haematoma which meant she was no longer able to manage her affairs due to lack of her mental capacity. When Mrs X was ready to be discharged, unfortunately, as there was no POA in place there was no one to coordinate where she was to go and who would take care of her high level needs. In this situation the State effectively became her Guardian. An application had to be made by the Local Authority to appoint a Public Guardian to gain Deputyship to release Mrs X’s funds so that she could be taken care of.
In the interim, before the Local Authority could gain the Deputyship and access to Mrs. X’s funds, (a long, drawn-out and expensive process), the Local Authority needed to fund her care using government funds. Their duty was to ensure that they provide the most cost effective means of care. They did not have a duty to ask Mrs X as to what her wishes were, because she had not expressed them specifically and in her current state she could not make her wishes known as she lacked capacity. She was therefore not able to move back to her home, with live-in carers and night-sitters as they are very costly. Although this was her desired wish, she had not shared it. She was put into a care home provided by the Local Authority until her funds were released. When her funds were finally released she was moved to a cost effective state care home as they did not know how long she would need the care, nor how long her funds would last. Also if she were to reach end of life or indeed pass away there is no one appointed to express her needs as to how she would like to be buried and to ensure she was buried in accordance to her beliefs.
This case study shows the importance of having your wants and wishes expressed (ideally in writing) and the importance of appointing someone who can uphold your wants and wishes by speaking for you should you ever become incapacitated. It is important to choose the right attorney to make those decisions for you. It is very important to have a Power of Attorney in place should you need one. In Mrs X’s case it was not known to the Local Authority that she was a devout Christian. Mrs X continues to reside in a care home chosen by the Local Authority. Her home was sold, and her funds have been transferred to the Local Authority to manage her affairs in her best interests.
In addition, there is no one from the community to come and visit her and to pray with her because no one was aware of her wishes with respect to her faith.
In the scenario above the couple had no next of kin, however the need for a LPA is as important where you have next of kin. The LPA will allow you to name one or more people you trust to look after your financial, health and welfare in the event you lose the capacity to think and act for yourself. It will also avoid any conflicts which may arise in such situations.
Further resources
On Lasting Powers of Attorney (written and audio guide):
https://www.alzheimers.org.uk/get-support/legal-financial/lasting-power-...
Government guide: https://www.gov.uk/power-of-attorney
Video guide: https://www.ageuk.org.uk/information-advice/money-legal/legal-issues/pow...
