While you may not want to think about a time when you can’t make decisions for yourself, it’s best to be prepared. That’s where power of attorney comes in.
A power of attorney is a legally endorsed document that gives someone else the right to make decisions for you. They can act on your behalf if you either no longer want to make your own decisions, or can no longer do so.
There are various reasons why this might be something you choose, ranging from a long stint in hospital where you want to make sure your affairs are taken care of, or a diagnosis of something like dementia that means at some point in the future you won’t be able to make your own decisions. This is known as not having ‘mental capacity’ to make your own decisions.
What does mental capacity cover?
It means the ability to make decisions when they need to be made. People need to fully understand the decision they’re making and why. Some people will be able to make decisions about simple things (what to watch on TV) but don’t have the mental capacity to understand the ramifications of financial decisions.
Typical decisions that are impeded by lack of mental capacity include financial decisions – on things like paying mortgages, investing savings or buying things, and health decisions – what kind of treatment you might need.
There are different kinds of power of attorney:
- Ordinary power of attorney.
- Lasting power of attorney.
- Enduring power of attorney.
Ordinary power of attorney
This is a legal document that means one or more people (known as the ‘attorney’), can make financial decisions on your behalf. It is only valid while you retain mental capacity to make decisions. So, this could cover periods where you need someone to act for your interests while you’re incapacitated in hospital, for example.
Other times you may want to use this is when you can’t get to the bank and want someone else to be able to access your account for you, or you want someone to act for you while you’re there to see what they do.
It can be limited, so that the attorney can only deal with some of your assets. For example, they could have access to your bank accounts but not your mortgage account. If you want to make sure there is someone to make decisions for you in the event that you no longer have the mental capacity to do so, then you should think about setting up a lasting power of attorney.
Lasting power of attorney (LPA)
An LPA gives someone you trust the legally endorsed authority to act on your behalf if and when you can no longer do so for yourself. If you lose mental capacity they will step in and look after your affairs.
There are two different kinds of LPA, one for financial business and one for health and care.
An LPA for financial decisions covers investments, paying your mortgage, buying and selling property, paying bills and sorting our repairs on property. You can have an LPA for financial decisions if you still have mental capacity, or you can state in the document that you only want to have an LPA if you lose mental capacity. You can limit their decisions making or allow them to make decisions on everything.
An LPA for health and care can only be in force when you have lost mental capacity. It covers decisions on things like where you should live, what kind of medical care you should receive, the food you eat, what kind of activities you do and the people you interact with. Special permission can also be given to the attorney about what kind of life saving treatment you should have.
It’s important to realise that just because you’re in a civil partnership or married, this doesn’t give your partner the legal ability to sort these things out for you. They still need an LPA to make it legal.
Enduring power of attorney (EPA)
These were replaced by LPAs in 2007, but if you signed one before then it’s still valid. If you do have one, it’s best to check it out and make sure that everything you want is covered. It may be best to instruct your solicitor to set up an LPA depending on your needs.
How to set up a power of attorney
It depends which kind you want to set up. An ordinary power of attorney is the most straight forward. You can sort this out by contacting Citizen’s Advice or a solicitor and obtaining the standard wording you need.
To set up an LPA, it’s more complicated and involves getting the correct forms and information pack from the Office of the Public Guardian. You can also get your solicitor to do it for you, although you don’t have to.
Once the forms have been filled out you need to get the LPA signed by a certificate provider, which confirms that you weren’t put under any pressure to make it. It has to be someone you know well, or a professional like your doctor or solicitor. The LPA then needs to be registered by the Office of the Public Guardian. There is a fee, and it won’t be valid until it’s registered.