What is Power of Attorney?
Power of Attorney (PoA) allows you to choose someone else to make important decisions or act on your behalf, should you be unable to do so in the future.
This includes making decisions about your health and living arrangements or managing your financial affairs. For example, a PoA will make it easier for someone to deal with third parties, such as banks, the tax office or the local council on your behalf.
You can put a Power of Attorney in place at any time, as long as you are capable of making your own decisions at the time the document is signed.
In England and Wales, there are three types of Power of Attorney in operation. These are explained in more detail below.
- Lasting Power of Attorney
- Ordinary Power of Attorney
- (historically) an Enduring Power of Attorney.
Who can be given given Power of Attorney?
You can grant Power of Attorney to anyone aged 18 or over. You can give this ‘power’ to one or more people. They are known as ‘attorneys’ and you are known as the ‘donor’. You can also nominate replacement attorneys who will take over the responsibility if the primary attorney is unable or unwilling to act.
It’s important that you choose people you can trust to act in your best interests. Typically, this will be a spouse, partner, family member or friend, but it could be a professional person, such as a solicitor.
If you’re appointing more than one person, you must decide if they will make decisions:
- separately or together: sometimes called ‘jointly and severally’, which means attorneys can make decisions individually or with other attorneys; or
- together: sometimes called ‘jointly’, which means all the attorneys have to agree on each decision.
You can also choose to let them make some decisions ‘jointly’, and others ‘jointly and severally’.
Power of Attorney in Scotland and Northern Ireland
Why should I set up a Power of Attorney?
If a Power of Attorney isn’t set up in advance, it can lead to complications if you (or a loved one) have difficulty looking after your own finances in the future, or if you will need care or support arrangements to be organised.
For this reason it’s best to organise a PoA sooner rather than later. This will give peace of mind to both yourself and your family members. If you wait until it is urgently needed, it may be too late at that stage.
- Find out how Which? can help you set up a Power of Attorney.
If you’re concerned that someone you care for might lose their mental capacity (for example, if they’re in the early stages of dementia), talk to them about organising a PoA as soon as possible. The result of not doing this can be a time-consuming and drawn-out process, and it may require you to go through the Court of Protection – for more information, see ‘What if your loved one lacks mental capacity’, below.
My advice to other people in my generation is to set up Lasting Power of Attorney now to make things easier for your children when the time comes.
Lasting Power of Attorney (LPA)
This is the most common type of Power of Attorney. There are two kinds of LPA; you may want either one or both types in place.
- Property and Financial Affairs LPA: this covers things such as managing day-to-day finances, debts, benefits – such as the Attendance Allowance and Personal Independent Payments (PIP) – and buying or selling property. It can be used both before and after the donor has lost mental capacity.
- Health and Welfare LPA: this covers issues such as NHS treatment, care and housing. It can only be used after the donor has lost mental capacity.
Setting up a Lasting Power of Attorney is straightforward. We give step-by-step advice in a separate article:
Ordinary Power of Attorney (OPA)
An Ordinary Power of Attorney also authorises someone to act on your behalf, but it is only valid as long as you have mental capacity. You might choose an OPA if you want someone to look after your financial affairs for a temporary period. For example, if you have health problems or an accident, or if you are abroad for a long period of time.
Ordinary Power of Attorney should not be used if you:
- have been diagnosed with a health condition that could lead to mental incapacity,
- are worried that you may develop such a problem in due course; or
- want to put in place arrangements to ensure your affairs are managed by someone you trust in the event you lose mental capacity in the future.
Under these circumstances, it’s more appropriate to use a Lasting Power of Attorney.
Enduring Power of Attorney (EPA)
It is no longer possible to set up a new Enduring Power of Attorney (EPA) – they were abolished in October 2007. But if there is already one in place it will still be valid should you need to register it in future.
An EPA is only applicable to financial affairs, so if you (or the person you are caring for) have one in place, you may want to consider replacing it with a Lasting Power of Attorney.
How to use a Lasting Power of Attorney
As soon as a Property and Financial Affairs LPA has been registered and the documentation received, it can be used at any time that you see fit. You and the people you have appointed as your attorneys don’t have to wait for you to lose capacity.
A Health and Welfare LPA can only be used once the donor has lost the capacity to act on their own behalf.
If you are caring for someone who is very ill, it might be that you need to use a PoA straight away. Or you might need to use it every now and then for short periods, for example while they are in hospital. On the other hand, the document might sit in a drawer for years before it’s needed, but it can be reassuring to know that the legal paperwork is in place should it ever be needed.
To use the Lasting Power of Attorney, you must show the original document or a certified copy (not just a photocopy) to any organisation that you want to deal with on your loved one’s behalf, including their bank.
If you need additional certified copies at a later date, any solicitor should be able to do this for a small fee.
The document might sit in a drawer for years before it’s needed, but it can be reassuring to know that the legal paperwork is in place should it ever be needed.
How much does Power of Attorney cost?
There is a standard fee of £82 to register a Power of Attorney in England and Wales. To register both a Property and Financial Affairs LPA and a Health and Welfare LPA, the fee would therefore be £164.
If you’re on a low income, you may qualify for a lower fee. Read more about PoA fees and how to fill in the forms.
Which? Wills Service has an affordable service that helps with choosing the right type of Power of Attorney for your needs and filling out the forms. You can also have the forms reviewed by a legal professional.
What if your loved one lacks mental capacity?
If the person you care for is no longer able to make their own decisions and doesn't have a Power of Attorney in place, it’s too late to apply for one. In this situation, you’ll have to make an application to the Court of Protection.
The Court of Protection represents the best interests of people who can’t make decisions for themselves. The Court can:
- decide whether someone is mentally capable of making decisions or not
- make decisions about the affairs of someone lacking mental capacity.
In the absence of a Lasting Power of Attorney, the Court can appoint a ‘deputy’ to manage someone’s affairs. This is most likely to be a close relative, but the court can appoint a professional if there is no one else suitable to do it.
Read more about appointing a deputy in our article about the Mental Capacity Act.
Power of Attorney fee refund scheme
If you applied to register a Lasting or Enduring Power of Attorney between 1 April 2013 and 31 March 2017, you may be entitled to a partial refund of the fee you paid as the Ministry of Justice has reviewed the scale of fees paid during that period. You must claim your refund by 31 January 2021. See the gov.uk website for more details.
When to consider a ‘living will’
If there are specific medical treatments that you don't want to receive in the future, you should also consider recording these in an advance decision to refuse treatment. Also known as a ‘living will’, this gives those acting on your behalf the authority to refuse the treatments you’ve specified, including life-sustaining treatments such as being put on a life support machine or being resuscitated if your heart stops.
Here are some useful hints and tips for where to get a Power of Attorney form and how to fill it in.
How to help yourself or a trusted family member to deal with financial affairs, including using third-party mandates.
From reviewing your pension options to making a will, here’s how to put a financial plan in place for later life.