What are powers of attorney?
Powers of attorney grant a person (ie the attorney) the power to make decisions on your behalf.
Powers of attorney can prove immensely valuable in situations where we are unable to independently make financial or health-related decisions.
There are two types of power of attorney: a General power of attorney (for one-off events) and a Lasting power of attorney (LPA).
What is a lasting power of attorney?
An LPA allows you to appoint one or more people to deal with your property and financial affairs and/or make health and welfare decisions on your behalf.
LPAs are the most common form of power of attorney. They were introduced on 1 October 2007 under the Mental Capacity Act 2005 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, it is still 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.
Mental capacity: what is it and do I have it?
Mental capacity is defined in the Mental Capacity Act 2005 and 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. You will lack mental capacity if you have an impairment of the mind or brain as a result of an illness (eg dementia) or external factors (eg drugs or trauma) and you are unable to make specific decisions when needed because of this impairment.
For more information, read Mental capacity and medical consent.
What are the types of LPA?
There are two types of lasting power of attorney, an LPA for property and financial decisions (also known as an ‘LPA PF’) and an LPA for health and welfare decisions (also known as an ‘LPA HW’).
LPA for property and financial 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:
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selling your home
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paying bills
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opening, closing and/or operating bank accounts
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repairing your property
You can decide to restrict these decisions.
LPA for health and welfare decisions
Your attorney can only use this if you no longer have mental capacity. Your attorney will be able to make decisions about:
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your medical care
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where you should live
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your day-to-day (eg what you should eat and what you should wear)
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what social activities you can participate in
What decisions will I have to make?
When creating an LPA you need to decide who will make important decisions for you in the future. You need to decide:
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who to appoint as your attorney(s)
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how your attorney(s) will make decisions
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if you wish to restrict your attorney(s)
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who will substitute your attorney(s) if they are no longer able to act
Appointing your attorneys
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 18 and have mental capacity.
If you are making an LPA for property and financial affairs your attorneys cannot be bankrupt or subject to a debt relief order (DRO). Examples of people who can act as your attorney include:
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a family member
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a close friend
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your spouse or partner
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a professional (eg solicitor)
When deciding on who should act as your attorney, consider:
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how well the prospective attorney looks after their own affairs (eg finances)
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how well you know the prospective attorney
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if you trust the prospective attorney to make decisions in your best interests
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how willing the prospective attorney will be to make decisions on your behalf
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:
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jointly - this means that all your attorneys must agree to every decision made on your behalf
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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. However, 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 LPA about how you would like them to act in certain situations.
Substitute attorneys
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 LPA immediately, then these people will not be told about the arrangements at this point in time.
However, with a LPA, your attorneys can only act under the document and on your behalf once it has been registered with the Office of the Public Guardian (OPG). Note that this process can take up to 20 weeks. If your attorneys do register the document at some stage in the future, they 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.
Ending a lasting power of attorney
Once made and signed, an LPA last indefinitely unless revoked by the donor, the attorney, the Court of Protection or by operation of law. If you want to revoke a Lasting power of attorney you need to follow a specific process. For more information, read Revoking a power of attorney and lasting power of attorney.
If you have any questions about LPAs, Ask a lawyer. If you require an LPA, use our LPA drafting service.
Digital powers of attorney and other changes
In 2023, the UK government passed the Powers of Attorney Act 2023. This Act will introduce various changes to the LPA system, although it hasn’t yet been determined when these will come into effect. The changes are set to include:
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allowing fully digital LPAs to be created
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only allowing the donor of an LPA to register it and setting identity verification requirements for registering an LPA
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making more people eligible to object to an LPA
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requiring the OPG to notify certain people when an LPA registration is started and completed
The most widely impactful of these changes is likely to be the introduction of fully digital LPAs. More detail will be added to this legal guide as it becomes available.
