What is Power of Attorney?

09 April 2021

Power of Attorney is a commonly used legal term, but what does it mean and how can you get Power of Attorney?

Find out more in this guide below.

What does Power of Attorney mean?

If you give someone the Power of Attorney, you grant them the legal right to make decisions on your behalf on issues such as your finances, medical decisions and welfare. The Power of Attorney itself is a legal document. You should apply for a Lasting Power of Attorney while you still have the mental capacity to decide who should manage your affairs.

This is a legal document that lets the donor (you) appoint one or more people (known as attorneys) to help the donor to make decisions or to make decisions on the donor’s behalf.

You should apply for a Lasting Power of Attorney while you still have the mental capacity to decide who should manage your affairs.

 

What is 'mental capacity'?

Mental capacity refers to your ability to make decisions at any given time, or communicate your thoughts clearly. Knowing whether someone has mental capacity can be difficult; a patient with dementia, for example, may be able to make some decisions, but not others. When it comes to arranging your Power of Attorney, what matters is that you, the ‘donor’, have the mental capacity to understand the decision you’re making and its consequences.

 

Why should I have a Power of Attorney?

While every situation is different, arranging the Power of Attorney can come at a difficult time for families. But hard as it may be to think about a life without mental capacity, there are many advantages of signing the Power of Attorney:

  • Choice over your future – Having a trusted person make decisions on your behalf, rather than a court, is undoubtedly beneficial.

  • Clarity with your family – Creating the Power of Attorney document is an opportunity to express your wishes to your family and discuss any questions or concerns they may have.

  • Protection for your attorney – Making a clear legal declaration that a named person can manage your affairs would eliminate the prospect of anyone questioning their motives.

  • Estate management – Appointing an attorney means decisions about your money and assets can be made more quickly, reducing delays when it comes to distributing an estate.

  • Peace of mind – No one wants their future to look uncertain, but signing a Power of Attorney means you’ll have some assurance that decisions made on your behalf will reflect your wishes.

Types of Power of Attorney

It’s important to understand what is meant by Power of Attorney, as concepts like enduring and Lasting Power of Attorney can be easily confused. Here are the definitions you should familiarise yourself with:

Lasting Power of Attorney

A Lasting Power of Attorney (LPA) is the most frequently used type of Power of Attorney you will encounter. It’s called a Lasting Power of Attorney because it’s designed to cover a long period of time, if required. The LPA does not expire, though it can be cancelled by the attorney, or the donor if they still have mental capacity.

You can make an LPA at any time, so long as you’re able to make decisions through your own volition. Often, a donor will give someone a Lasting Power of Attorney if they’ve been diagnosed with a serious illness, or anticipate that they may need someone to make decisions on their behalf in the near future.

There are two types of LPA:

 

  1. Property and financial affairs this grants your attorney the right to make decisions about your property and money, which can include household bills, taxation, bank accounts, pensions, welfare benefits and selling a home.

  2. Health and care decisions this enables your attorney to make decisions about your medical care, from washing to eating, as well as medical interventions if your life is in danger.

It’s advisable to set up both LPAs at the same time, though it’s not a requirement. As we’ll explain, the Lasting Power of Attorney has replaced the Enduring Power of Attorney.

Enduring Power of Attorney

Following a change in the law in 2007, it’s no longer possible to make an Enduring Power of Attorney (EPA); you should take out an LPA instead. Previously, a registered EPA could be used to make decisions on behalf of someone before their mental capacity had been diminished.

Ordinary Power of Attorney

An Ordinary Power of Attorney (OPA) is a different proposition, as these are designed to give someone the right to make decisions on your behalf for a limited period of time. For example, if you’re unwell, recovering from an injury or overseas, you may wish to make an OPA and can set limitations on its powers if you wish. Unlike an LPA or EPA, an OPA doesn’t need to have been registered with the Office of the Public Guardian.

How to give Power of Attorney?

If you wish to give someone the Power of Attorney, you can set this up in a few steps.

  1. Appoint one (or more) person to be your attorney. They could be a relative, friend or colleague; they just need to be over 18, and doesn’t have to be a UK citizen.
  2. Complete the forms to register them as your attorney – you can do this online or using paper forms.
  3. Register your LPA with the Office of the Public Guardian, if you live in England or Wales. The process differs in the rest of the UK.

Visit GOV.UK for more information on how to get (and grant) Power of Attorney.

Plan your future with confidence

Making important decisions about your health, money and loved ones can be challenging to think about. But our guides for the over-50s provide plenty of helpful pointers, from witnessing a will to discussing death with your family. Find out more

Find out more about our Over 50 Life Insurance