Protecting your possessions with a Power of Attorney

What is a Power of Attorney?

A Power Of Attorney signs over your legal decisions and legal rights to one or more people (known as your attorneys) in the event that you are unable to make these decisions yourself.
power-of-attorney

What is meant by Mental Capacity?

There is more than one type of Power Of Attorney and the type needed could be determined by ‘Mental Capacity’.

Mental capacity refers to a person’s ability to make decisions and communicate those decisions when they need to be made.

Reasons for not having mental capacity can include:

Being unconscious due to an accident or illness
A stroke
Degenerative diseases, such as Parkinson’s or Amyotrophic Lateral Sclerosis (ALS)
Late-stage Dementia or Alzheimer’s

Which type of Power of Attorney do I need?

There are two different types of Power Of Attorney, and they are used in different situations, although you may need to have both simultaneously.

Ordinary Power of Attorney

An Ordinary Power of Attorney (OPA) enables your designated person(s) (or attorney) the legal authority to act on your behalf. This is with respect to your finances for a temporary period of time. This can include making decisions and taking relevant actions representing your best interests. An OPA is only valid whilst you still retain your state of mental capacity.

An OPA could be utilised in the following instances:

For temporary hospital stays
Should you have difficulties with leaving the house
If you are suffering from an illness

Your attorney can have complete control of your financial affairs with a Lasting Power of Attorney. You can stipulate access and restrict them to have specific powers such as:

Enabling access to your bank account
Enabling them to make payments or sign cheques on your behalf

Lasting Power of Attorney (LPA)

There are two forms of Lasting Power Of Attorney. They are split into Property and Financial Affairs and Health and Welfare.

LPA – Property and Financial Affairs

A Lasting Power Of Attorney for Property and Financial Affairs enables your designated attorney the legal authority to help you either make decisions or make decisions on your behalf.

This POA is specific to actions in respect of your property and all financial affairs. This is either with your permission or should you lose your mental capacity.

Examples of where an LPA (Property and Financial Affairs) can be used are as follows:

Managing bank accounts
Paying bills and mortgage payments
Repairing or selling your property

LPA – Health and Welfare

This enables your designated attorney the legal authority to make decisions. They can take relevant actions in respect of your health and welfare in the event that you lose your mental capacity.

This LPA can only be used when full mental capacity has been lost.

Examples of where an LPA (Health and Welfare) can be used are as follows:

Medical care
Social care
Dietary choices
Who you should be allowed to have contact with
Accommodation and living needs

When setting up an LPA for Health and Welfare, you will also need to decide if your attorney is permitted to make decisions about life-saving treatments.

Points of note for both Property and Financial Affairs and Health and Welfare LPA’s:

You are only able to set up an LPA whilst you still retain a sound mental capacity – someone cannot set this up on your behalf posthumously.
Should you need an LPA (Property and Financial Affairs) and an LPA (Health and Welfare), you will need to make two separate applications.
You can have the same attorney for both types of LPA
If your attorney is dealing with any of your financial matters, they must keep their money and your money separate. They should also keep accounts of how any money is used.

Enduring Power of Attorney (EPA)

An EPA only refers to legal choices and actions in respect of the property and financial decisions. If you lose mental capacity, then your attorney will need to register the EPA in order for it to take effect.

If you require a POA for health and welfare purposes too, then you will need to set up an EPA and a Lasting Power Of Attorney (Health and Welfare).

Please note that an Enduring Power Of Attorney was formerly known as a Lasting Power Of Attorney (Property and Financial Affairs) before being altered on 1st October 2007. Any contracts made before this date will still be valid.

How to choose an attorney?

Due to the private and personal nature of the affairs that your attorney will be handling, you will need to elect a person(s) that you trust and who will safeguard your best interests.

You may want to consider:

A close family member or long-term friend
Your partner, civil partner or spouse
A professional representative, such as your solicitor (although this may involve additional fees).

You are permitted to choose more than one attorney. However, you will need to stipulate whether an attorney can make decisions alone or whether all must concur before a final decision is made. There is also the option to allow attorneys to make some decisions alone and others collectively.

What will happen if I don’t set up a Power of Attorney?

In lieu of any valid or legal Power Of Attorney (lasting or enduring), should you lose mental capacity, then The Court Of Protection can appoint a deputy to make decisions on your behalf.

If a person known to you wants to be allowed to make decisions on your behalf, they can apply to The Court Of Protection to become a deputy covering either or both of the following:

Property and Financial affairs
Health and Welfare decisions

If you need to appoint someone to make decisions about your welfare, money or property, find a specialist Power of Attorney solicitor. Do you need advice on Wills and Probate related issues? Ask a Wills Solicitor or Probate Solicitor on Qredible.co.uk!

Related article: The simple guide on how to make a will