What is Power of Attorney?
Power of Attorney is a legal document where one person (the donor) gives another person the right to make decisions on their behalf.
If you want someone to act on your behalf in financial or medical decisions, you'll need to give them Power of Attorney over your affairs.
You can only set up a Power of Attorney while you still have the ability to weigh up information and make decisions for yourself, known as 'mental capacity' - so it's worth putting one in place early on.
- If you'd like to set up a Power of Attorney, for yourself or someone else, Which? Wills can help - and until the end of February, you can save 30%.
Lasting Power of Attorney (LPA)
Lasting Power of Attorney is the most common form of Power of Attorney. It is an ongoing arrangement with no expiry date that will allow another person to make decisions on your behalf.
Once the document is registered, it can be used immediately, with your permission while you still have capacity, or it can take effect from when you lose mental capacity.
An LPA has to be registered with the government, through the Office of the Public Guardian. You can find out how to do this in our guide to setting up Power of Attorney.
Types of Lasting Power of Attorney
There are two types of Lasting Power of Attorney.
We would recommend setting both up at the same time. Many people do this while reviewing or revising their will, and you may be able to use the same solicitor.
Property and financial affairs LPA
This gives your attorney the power to make decisions about your money and property, including:
- managing bank or building society accounts
- paying bills
- collecting a pension or benefits
- if necessary, selling your home.
Once registered with the Office of the Public Guardian, it can be used immediately, or held in readiness until you lose capacity.
Health and welfare LPA
This gives your attorney the power to make decisions about:
- your daily routine (washing, dressing, eating)
- medical care
- moving into a care home
- life-sustaining medical treatment.
It can only be used once you are unable to make your own decisions, though you will need to agree to it while you still have capacity.
Find out more: Setting up a Power of Attorney
Enduring Power of Attorney (EPA)
No new Enduring Power of Attorneys have been set up since 2007.
EPAs set up before October 2007 can still be used to control the property and financial affairs of the donor.
If the donor still has mental capacity, an existing EPA can be used without being registered with the Office of the Public Guardian. If the donor lacks capacity, for example, as the result of dementia or a stroke, the EPA must be registered to be used.
Ordinary Power of Attorney
An Ordinary Power of Attorney gives another person authority to act on your behalf for a limited time period.
As soon as you lose mental capacity, the Ordinary Power of Attorney will expire. This means it's not suitable if you need someone to manage your affairs after you've lost the ability to do it yourself.
This option is most useful if you temporarily want someone to make decisions for you - for example, while recovering from an injury or during an extended overseas trip.
If you choose, you can specify a time period for an Ordinary Power of Attorney, or restrict it to specific activities.
You don't need to register this document with the Office of the Public Guardian.
Do you need a LPA and an Ordinary Power of Attorney?
In the graphic below, we explain the difference between a Lasting Power of Attorney and an Ordinary Power of Attorney to help you decide which one you need.
Which? Wills can also help you find the best option for your circumstances.
In Scotland, Ordinary Powers of Attorney are known as General Powers of Attorney (GPA) and do not need to be registered before use.
Where the person giving authority lacks capacity, a Continuing Power of Attorney (CPA) is required to control their financial affairs. This must be registered with the Scottish OPG.
For decisions about a granter’s health and welfare, a Welfare Power of Attorney (WPA) is required. This also needs to be registered and can only be used if the donor lacks capacity.
You can also set up a Combined Power of Attorney. This combines the powers of a CPA and WPA.
In Scotland, only a prescribed person can confirm that you are capable and able to grant the Power of Attorney. As part of the process, a solicitor registered to practise law in Scotland or a registered UK medical doctor must carry out an interview with you and confirm that you understand the nature and impact of making a Power of Attorney.
If your loved one is no longer able to make their own decisions, it’s too late to apply for a CPA or WPA. In this situation, an application can be made for a ‘Guardianship Order’ to the appropriate Sheriff Court.
In Northern Ireland, EPAs are still used. They can be ordinary Power of Attorneys if the donor retains capacity.
If the donor lacks capacity, only an Enduring Power of Attorney that has been registered with the Office of Care and Protection may be used.
Unlike other parts of the UK, you cannot set up a health and welfare Power of Attorney in Northern Ireland.
For more information on setting up an EPA in Northern Ireland, visit nidirect.
If your loved one no longer has mental capacity, it’s too late to set up an EPA. You’ll need to make an application for a ‘Controllership Order’ to the Office of Care and Protection.
What is your duty of care as an attorney?
Acting as an attorney obliges you to maintain a duty of care to the donor, not to benefit yourself. It’s important to avoid any potential conflicts of interest.
Specifically, you must keep the donor’s money and property separate from your own and keep accurate accounts in all of your dealings as an attorney.
When do you need Lasting Power of Attorney?
Putting in place a Lasting Power of Attorney can give you peace of mind that someone you trust is in charge of your affairs.
If you're facing an illness, or believe your mental capacity might deteriorate, it's worth thinking about who you would like to handle your affairs.
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.
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.
Managing finances without Power of Attorney
Until such a time as a Power of Attorney might need to be actioned, there are several ways you can help a relative or friend manage their bank and building society accounts.
Your loved one will, of course, have to give their permission for any of the suggestions below.
This is a document that tells your bank, building society or other account provider that they can accept instructions about your money from a specific named person. It gives that person the authority to run only your bank account for you.
Your relative would need to contact their bank to ask for a ‘third-party mandate’ form. After they’ve signed and returned this form, the appointed ‘third party’ (you) will be allowed to make calls, query statements and operate the account(s) on their relative’s behalf.
You won’t be allowed to arrange a formal overdraft or open or close an account.
Another option might be to set up a new joint account for bills, so that you and your loved one have joint access to manage the account online or deal with problems. However, bear in mind that there would be tax and other implications to opening a joint account.
Each account holder would be liable to pay any Income Tax and Inheritance Tax as well as being jointly liable for any debts.
If you are concerned that your relative might inadvertently lose or overly use any credit cards they possess, discuss the possibility of cancelling them.
You could otherwise talk about decreasing the credit limit so there is less chance of fraud if the card is lost or stolen, or your loved one falls victim to a scam.
Many older people rely on volunteers or professional carers to run errands such as buying weekly shopping. But this can get complicated if the person is no longer able to manage their finances or would struggle to get to a cash point to provide the carer with money for this purpose.
Some banks (such as Natwest, RBS, Ulster Bank and Starling) now enable customers to order a second bank card (with a separate PIN) to give to a trusted volunteer. The trusted person wouldn't have the individual's normal bank card details or PIN.
And they'd only be able to access a limited amount of funds that would be ‘topped up’ in advance by the older person.
Paying household bills, such as electricity, gas, telephone, water and Council Tax, can be an additional worry. If your relative is paying bills at the Post Office or by cheque, there is the chance that some bills may inadvertently not get paid.
To simplify the process, discuss setting up direct debits or nominating a third party.
Setting up direct debits
Setting up direct debits for regular bills, such as gas and electricity, could help to simplify things. Your relative will have to contact their service providers to request a direct debit mandate and sign the forms.
Some organisations offer discounts if you pay by direct debit, so if your loved one is resistant to the idea of money leaving their account in this way, they might be encouraged by the thought of saving money.
Smaller monthly direct debits can also help them to budget if they’re on a limited income.
Nominating a third party
Under normal circumstances, utility companies will only speak to the named account holder, but it’s usually possible to nominate a third party to deal with providers.
Again, your relative will need to set this up by contacting the service provider and explaining the situation. The company will explain what to do next.
As the named third party, you will receive copies of bills and be able to pay them (if a direct debit hasn't been set up), but you won’t become liable for them.