What is a Power of Attorney?
A power of attorney grants one person the authority to act on behalf of or represent another.
Generally it is used when one person has lost the ability or the desire to do this for themselves, and one of the most common uses of granting one includes foreseen health issues, such as Alzheimer’s. There may be other situations as well when a Power of Attorney may be useful, for example if you are leaving your business for a while, maybe on an extended holiday or maternity leave, and would like someone else to be able to handle the business or your private financial affairs completely. The person who is granted the authority is then called the “attorney” and the person they represent is called the “donor” or “grantor”.
What are the different kinds of Power of Attorney?
There are various forms of a power of attorney. These are:
- A Lasting Power of Attorney for Health and Welfare (also referred to as “Personal Welfare LPA”), is a commonly used variation when people may foresee mental health issues stopping them from making reasonable judgements.
- A Lasting Power of Attorney for Property and Financial Affairs (also referred to as “Property and Financial Affairs LPA”), specifically deals only with your property and finances.
- An Enduring Power of Attorney is a traditional method but no longer in recommendation
- An Ordinary (or General) Power of Attorney is a short term granting of power.
The most commonly used of the four in the UK are the combination of Lasting Power of Attorney for Health and Welfare and Property and Financial Affairs. In Scotland Lasting Powers of Attorney are called Continuing Powers of Attorney.
What is an Enduring Power of Attorney?
The Enduring Power of Attorney was replaced by the Lasting Power of Attorney in 2007, though those granted before then are still valid. These are no longer valid in the UK if set up after 2007, and your solicitor would most likely suggest you consider a suitable LPA or a combination of both.
What is an Ordinary Power of Attorney (OPA)?
An Ordinary Power of Attorney grants the attorney the right to act for the donor for a limited period, for instance while they are in hospital or away on holiday. This is a short-term transfer of authority, however, if you lose your mental capacity while the OPA is in effect, it is immediately invalidated. As such, it doesn’t protect you if you have diminished mental health or decision making capabilities.
Do I need a Lasting Power of Attorney?
The fact is, that anyone with a medical condition that may leave them with diminished mental capacity, due to potential onset of mental health issues, dementia, or even injury to the brain causing loss of lucidity, so it is worth getting a power of attorney put in place.
However, life is, sadly, unpredictable. If you are involved in a high risk career or have risky hobbies (for example racing cars), you should make provisions for your health and care should in you be involved in a situation that leaves you with diminished mental capacity (for example a car crash).
If you have a history of strokes or any other medical conditions that may reduce your capacity to make judgement calls, we would encourage you to consider a lasting power of attorney for health and welfare as well.
What happens if someone becomes mentally incapable before they set up an LPA?
Should someone become mentally incapable before they set up an LPA then a family member will need to apply to the Court of Protection to become a deputy. This can be a difficult process and can cost thousands of pounds.
Do I lose control of my affairs straight away?
No, not necessarily; you can elect to have the LPA be effectively immediately, or you can specify that it becomes effective only after you lose mental capacity and ability to make rational decisions.
Specifically, the Personal Welfare LPA only comes into play once you have lost mental capacity, but the Property and Financial Affairs LPA can be activated while you are in good mental health. As such, a Property and Financial Affairs LPA should be written up very carefully, and be made out to someone you trust implicitly with your financial affairs. In cases where you feel that the decisions that your attorney is making on your behalf do not serve you well, a solicitor may be able to help dispute the current LPA.
When can it be set up?
An LPA can only be set up if you are mentally capable of doing so; in other words if you are capable of selecting the appropriate person or people to act as your attorney and in deciding what powers your representative will be granted. You must be at least 18 years old in order to be able to set up an LPA.
Both types of LPA’s must be registered with the Office of the Public Guardian. In addition, before it is registered, there is a legal requirement to have the LPA signed by an individual that you know well, or of a recognised profession capable of certifying that you understood your rights and the document and weren’t put under pressure to sign the LPA. In most cases, your solicitor would be well placed to certify the validity of an LPA, while at the same time be able to advise you on the different rights that you may give away under each.
Do I need a solicitor?
You don’t necessarily need a solicitor, but it could be very useful to do so as it is the best way to ensure that the interests of both you and attorney are protected. At QualitySolicitors we promise a Free Initial Assessment service, so feel free to contact one of our Power of Attorney experts, or find your nearest solicitor here.