If you’re getting your affairs in order, you may be thinking, what is lasting power of attorney?
Unlike a will, which gives instructions for after your death, lasting power of attorney is used while you're still alive.
This legal document comes into force in the event that you lose mental capacity or need help making decisions about important matters.
This article will cover what is lasting power of attorney and why it’s a good idea to have one set up.
Here’s a summary of what we’ll cover:
- Lasting power of attorney is an agreement between two parties, the donor and the attorney(s).
- It legally gives the attorney(s) the power to make decisions on behalf of the donor relating to health, care, finances and property under certain conditions.
- It can speed up decision making and avoid confusion amongst families, especially for people who have progressive cognitive impairment.
- It’s also useful to have written an advance statement detailing your wishes for your care, financial matters and assets.
What is lasting power of attorney?
Lasting power of attorney (LPA) is a legal document in which someone is appointed to make decisions on your behalf.
It is made between the donor and their attorney(s) under the Mental Capacity Act 2005.
The donor gives the attorney(s) legal authority to make decisions regarding their personal finance property and health.
This could include paying for home care or deciding when should someone with dementia go into a care home.
Confused about care funding?
Why is it needed?
Lasting power of attorney (LPA) is used in situations where important decisions need to be made surrounding health, property and finance.
It comes into effect when you do not have the mental capacity to make decisions for yourself, or no longer wish to.
You can choose to have an LPA for just health or just finance, or both.
You can also set up a lasting power of attorney for your business or any other businesses that you are involved in.
How does lasting power of attorney work?
In the event that you are unable to make decisions, your attorney(s) make decisions on your behalf.
You can specify instructions for your attorney(s) to follow, for example a do not resuscitate order (DNR).
Or you can outline your preferences, which the attorney takes into account but is not legally obliged to follow.
This is why it’s important to have someone you know and trust acting for you, so your loved ones can accept the decisions being made.
When is lasting power of attorney used?
Lasting power of attorney can be set up long before it’s needed, in fact, anyone over the age of 18 can have one.
When setting it up you can specify when the LPA will come into effect, and under what circumstances.
For example, when you are experiencing cognitive impairment caused by ageing, mental health, accident or illness.
There are two different types of lasting power of attorney that relate to different decisions.
Health and welfare lasting power of attorney
For this LPA your attorney will be able to make any decisions about your treatment and care.
This could be treatment as a result of an accident or with a view to deteriorating health as a result of a condition.
The health and welfare LPA can only be used when you’re unable to make your own decisions.
Your health and welfare attorneys will be able to decide:
- Where you live and are cared for
- Care tasks such as personal care
- Medical treatments and options
- Your daily routine and diet
Confused about care funding?
Property and financial affairs lasting power of attorney
Unlike the health lasting power of attorney, you can approve your attorney to make decisions for you while you still have mental capacity.
But this must be stipulated in the agreement, otherwise it will not come into effect until you have been deemed to lack mental capacity.
The attorney managing your financial affairs will have the power to:
- Manage a bank or building society account
- Pay bills and spend your money on things you need
- Collect your benefits or pension – what benefits can you claim if you have dementia?
- Manage or sell a property and investments, which may be for care home fees.
- Buy gifts or make donations to charity in your interest
This LPA can be used, with your permission, as soon as it is registered to help make financial decisions.
Why do people make lasting power of attorneys?
You may decide to make a lasting power of attorney for health and welfare if you:
- Have been diagnosed with a serious illness such as dementia – what is dementia?.
- Want to make things easier for your family when it comes to making decisions
- Are getting older and want to be prepared for any illnesses or events that may arise
You may want to make a financial lasting power of attorney if you
- Own property
- Have savings and investments
- Want to ensure nothing happens to you money
- Wish for someone else to manage your money eg. paying household bills and managing accounts
Lasting power of attorney and loss of mental capacity
In the event that you lose mental capacity and don’t already have your affairs in order, it can cause confusion about what you want.
This is where a lasting power of attorney is helpful for you and your family members.
But to make a lasting power of attorney you must have the mental capacity to do so at the time of creating it.
That’s why it’s important to organise it sooner rather than later, to avoid any issues for your family.
What is mental capacity?
Mental capacity refers to the ability of the donor to make decisions regarding important matters, including their health and finances.
They must be able to communicate specific decisions at the necessary time they need to be made.
Mental capacity for this type of decision making is categorised by your understanding of:
- The decision you need to make
- Why you need to make it
- The outcome or consequences of your decision
Judging mental capacity
The ability to make simple decisions such as around activities of daily living does not reflect someone’s overall mental capacity.
Being able to choose what to eat does not necessarily mean they can make decisions around insurance or money, for example.
Equally, if someone has a disease that causes cognitive decline, it doesn’t always mean they can’t make decisions for themselves.
Attempts should always be made to overcome decision making difficulties and help the person decide for themselves.
How to make a lasting power of attorney
Making a lasting power of attorney is an easy process but can take a few weeks to put in place.
A person must be over 18 and have mental capacity at the time you make your lasting power of attorney.
You should also discuss your intentions with the relevant people who will be involved and get their approval or permission.
You can make an LPA with a solicitor or do it yourself by filling out forms and paying a fee via GOV.UK.
Paying the fees
In England and Wales, the registration fee for each LPA is £82.
Therefore, it costs £164 to register both a property and finance and a health and welfare LPA.
If you receive any financial benefits for elderly, you may be eligible for a discounted rate.
If you want a solicitor to fill out the forms from you, you will have to pay additional costs for their services.
Step by Step Guide to making an LPA
- You (the donor) must choose one or more people you trust (attorneys) and discuss with them.
- Complete the forms with the relevant information and check there are no mistakes that could delay your application.
- Register the form with the Office of the Public Guardian (it can take up to 20 weeks)
- Tell your relatives, solicitor, GP and others involved in your care.
What other considerations should you have for LPA?
When creating a lasting power of attorney it’s essential you discuss your wishes and any important information with your attorney(s).
This is so that they are well equipped to make decisions on your behalf when you no longer have capacity.
However, in addition to having LPA for health and finances, it is a good idea to write an advance statement.
This sets out your wishes and helps guide your attorney if there is still any uncertainty.
Ordinary power of attorney
Lasting power of attorney is not the same as this General power which is valid while you have mental capacity.
If you lose mental capacity, the General power of attorney will be revoked and the court must appoint someone to manage your affairs.
This can be a difficult position for families as the process can be costly and take a long time.
Are you worried about a loved one?
Enduring power of attorney
This service was replaced by lasting power of attorney in October 2007.
If you had an EPA, it should still be valid.
What if you don’t have lasting power of attorney?
There is no legal obligation to make a lasting power of attorney arrangement.
However, it can make decision making easier on your loved ones if and when you lose mental capacity.
This can save confusion and uncertainty about what you might have wanted and allows for the right arrangements to be made.
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