What is a power of attorney?
A power of attorney is a document that grants someone else (the attorney) the power to make decisions for you.
Any of us could at any time and at any age could find ourselves in a situation where we are unable to make financial decisions or health and welfare decisions ourselves.
When such a situation arises a power of attorney can be invaluable.
There are two types: a General power of attorney and a Lasting power of attorney.
What is a lasting power of attorney?
A lasting power of attorney allows you to appoint one person or more than one person to deal with your property and financial affairs; and/or make health and welfare decisions on your behalf.
Lasting powers of attorney are the most common form of power of attorney. They were introduced on 1 October 2007 and replaced enduring powers of attorney.
However, if you or your relatives or friends have an enduring power of attorney that was made before 1 October 2007 and you are still happy with it, the good news is it will still be valid (as long as it was signed correctly at the time).
What is the difference between a lasting power of attorney and general power of attorney?
A general (or ordinary) power of attorney is only valid whilst the donor (the person giving the power) is mentally capable of making their own decisions.
A lasting power of attorney remains valid if the donor loses their mental capacity and can give the donor peace of mind that someone they trust will make decisions about health and finances for them.
What is mental capacity?
Mental capacity means the ability to make a specific decision at the time it needs to be made. To have mental capacity you must understand the decision you need to make, why you need to make it, and the likely outcome of your decision.
What are the two types of LPA?
There are two types of lasting power of attorney, an LPA for financial and property decisions and an LPA for health and care decisions.
LPA for financial and property decisions
You can choose whether you want your attorney to have decision-making powers immediately or if you lose capacity.
Your attorney will be able to make decisions such as:
selling your home
repairing your property
You can decide to restrict these decisions.
LPA for health and care decisions
Your attorney can only use this if you no longer have mental capacity. Your attorney will be able to make decisions such as:
your medical care
where you should live
what you should eat
What decisions will I have to make?
When creating a lasting power of attorney you need to decide who will make important decisions for you in the future. You need to decide:
who to appoint as your attorney(s)
how your attorney(s) will make decisions
if you wish to restrict your attorney(s)
who will substitute your attorney(s) if they are no longer able to act
if you want to notify anyone immediately
Appointing your attorneys
First of all, you need to decide who you are going to appoint as your attorney or attorneys.
It goes without saying but these people should be people who you trust implicitly.
They are likely to be making some very important decisions on your behalf. Your attorneys: must be over the age of eighteen; cannot be bankrupt.
Deciding how your attorneys will make decisions
If you decide to have more than one attorney, you will need to decide whether your attorneys are given authority to act jointly and severally, or jointly.
Acting jointly: this means that all your attorneys must agree to every decision made on your behalf.
Acting jointly and severally: this means that any one of the attorneys can make decisions independently of the others.
For example, you may be happy to allow your attorneys to act jointly and severally if they are simply paying your bills, but you may want them to act jointly if they have to sell your property or make some other significant decision on your behalf.
Restrictions on what your attorneys can do
You can, if you want, put restrictions on what your attorneys can and can’t do. You can also provide guidance to your attorneys within your Lasting power of attorney about how you would like them to act in certain situations.
You may want to appoint substitute attorneys. The role of a substitute attorney is to stand in if one of your first choice attorneys is unable to act for you for any reason.
Letting other people know about the arrangements
You now need to decide whether you would like anybody other than your attorneys to be aware of the arrangements you have put in place.
If there is no intention to use the Power of attorney immediately, then these people will not be told about the arrangements at this point in time.
However, with a Lasting Power of attorney, your attorneys can only act under the document and on your behalf once it has been registered with the Office of the Public Guardian (this process can take up to 10 weeks). If your attorneys do register the document at some stage in the future, they would first of all have to tell the other people that they propose registering it.
The people who are given notice will then be given the chance to make representations to the Court on your behalf if they have any worries or concerns about the arrangement.
If you would like to know more about Lasting powers of attorney, Ask a lawyer.
If you want to revoke a Lasting power of attorney you need to follow a specific process. For more information on this, read Revoking a power of attorney and lasting power of attorney.