What is Power of Attorney?

Power of attorney is a legal document, which allows an individual, known as the ‘donor’ to select an individual or individuals, known as the ‘attorney’ so they can make decisions on their behalf. Decisions can relate to healthcare, property and finances. Assigning power of attorney can be essential when someone is unable to make decisions.

Power of attorney can be assigned for either a long-term or short-term basis. Long-term basis may be suitable if you want to plan ahead or have been recently diagnosed with a condition that could impact your mental capacity, such as dementia. You may consider short-term if you only need temporary support. For example, support with managing finances whilst you undergo surgery or recover from an illness.

Why is Power of Attorney Important?

Setting up a power of attorney ensures your personal affairs are managed by an individual or individuals that you trust, if you become unable to make decisions for yourself. Without power of attorney, your loved ones may experience complicated legal processes to gain authority to act upon your behalf. This be a stressful situation and can lead to delays in making important decisions for your well being and circumstances.

When Should Someone Set Up a Power of Attorney?

It is advised that you should set up a power of attorney whilst you still have the mental capacity to make informed decisions. Although it is possible to set up a Power of Attorney when you have low capacity, it can be a costly and time-consuming process for your loved ones. By setting up power of attorney whilst you still have full capacity, it also helps ensure your preferences are respected.

What Are the Types of Power of Attorney?

There are four types of power of attorney, which we have outlined below to help you identify which is right for you.

Lasting Power of Attorney (LPA)

The most common POA is lasting power of attorney and there are two types:

1. LPA for Health and Welfare: When you no longer have mental capacity, your selected attorney will make decisions about your wellbeing. This includes medical care, living arrangements and your daily welfare.
2. LPA for Property and Financial Affairs: With your permission, this can come into effect as soon as it has been registered or when you lose capacity. It enables your attorney to manage your financial affairs, which can include selling property, paying bills and managing investments.

Enduring Power of Attorney (EPA)

Lasting power of attorney replaced enduring power of attorney in 2007. However, EPA remains valid if it was set up prior to 2007. Enduring power of attorney differs to LPA because it only covers financial matters. EPA must be registered with the Office of the Public Guardian if the donor loses mental capacity.

Ordinary Power of Attorney

Ordinary power of attorney is used for temporary situations when the donor needs someone to support them with managing their finances. This could be when the donor goes on holiday, struggling to manage their financial matters or they are recovering from an illness.

However, this legal document is only valid if the donor has mental capacity, which is why it’s often used for short-term solutions.

Can Someone Have a Power of Attorney If They Don’t Have Mental Capacity?

It is important for individuals with health conditions affecting their mental capacity, like dementia, to have a POA in place. The Mental Capacity Act 2005 provides guidelines for assessing whether someone can make their own decisions.

If the individual isn’t deemed to have the mental capacity to create a POA, then their loved ones may need to apply for a deputyship through the Court of Protection. However, this can be a costly and time-consuming process, which is why it is advised POA is created when the donor still has mental capacity.

Is the Power of Attorney Responsible for Managing Care Home Fees?

A power of attorney will outline who is responsible for making health and financial decisions on behalf of the donor when they no longer have capacity. Therefore, the attorney will be responsible for managing care homes fees for the donor.

If you are looking for impartial advice regarding care home fees, please download a helpful handbook created by Symponia – a national care fees planning specialist.

How to Set Up a Power of Attorney?

To set up a power of attorney, you must complete the necessary forms and register them with the Office of the Public Guardian.

It is advisable to seek legal advice to ensure the document accurately reflects your wishes. For more information, please visit our how to guides.