What would happen if you suddenly lost mental capacity and became unable to make financial and welfare decisions for yourself? Lasting Powers of Attorney (LPAs) let you choose who can make those decisions on your behalf if you were no longer able to.

It’s not something any of us feel comfortable thinking about, but in the same way you might take out an insurance policy to protect your home, an LPA will protect your money and (in England, Wales and Scotland) your healthcare wishes. It’s an essential component of any financial plan.

Yet despite its importance, according to research by Canada Life, 78% of UK adults have not registered a Lasting Power of Attorney (LPA).

Have a say over your future care and financial decisions, ensuring your money and day-to-day well-being is managed

What are the benefits of having a lasting power of attorney?

In England and Wales, a Lasting Power of Attorney enables you to appoint people you trust to make decisions on your behalf, should you ever find yourself in a position that you can’t. It allows you to have a say over your future care and financial decisions, ensuring your money and day-to-day wellbeing is managed in accordance with your wishes.

In Scotland, you can achieve the same goals with a Combined Power of Attorney. In Northern Ireland it’s known as an Enduring Power of Attorney, but unlike in England, Wales and Scotland, you can’t give another person the legal power to make decisions about your health and welfare.

An attorney should be someone you trust. They don’t necessarily have to be a family member – they could be a friend or professional adviser.

An LPA enables you to:

  • Plan for your future, no matter what happens
  • Protect yourself and your family financially
  • Clearly state your wishes regarding your finances, and your health and welfare (except in Northern Ireland)

It’s a separate legal document to your will, although many people choose to get the two done at the same time and store them together.

Do I need a Lasting Power Attorney?

Anyone over the age of 18 can set up a Lasting Power of Attorney (or the closest regional equivalent). It’s not something that only older people should do. Unfortunately, anyone can suffer an accident or illness at any age, leaving you temporarily or even permanently debilitated.

But to set up a Lasting Power of Attorney in the first place, you need to have full mental capacity and be able to decide who you want to appoint. Once you’ve lost mental capacity, it’s too late.

If someone has had a catastrophic accident or develops a sudden life-threatening illness and time is of the essence, as long as they have their mental capacity you can apply to the UK’s Court of Protection to get an urgent or emergency court order. This will speed up the process, which may otherwise take up to 20 weeks to register.

You can also set up an Ordinary Power of Attorney (or General Power of Attorney, in Scotland and Northern Ireland), if you need a temporary arrangement perhaps while someone is in hospital recovering from an injury or illness and unable to manage their own affairs.

You may also come across an Enduring Power of Attorney (EPA). In England and Wales this was replaced by the LPA in 2007, but if you signed an EPA priory to 1st Oct 2007, it should still be valid. However, in Northern Ireland it continues to go by the same name.

Without a LPA, the court will appoint a deputy to make all the decisions regarding your health and finances

What happens if I don’t appoint a power of attorney?

If you don’t have a Lasting Power of Attorney (or its national equivalent), the court will appoint a deputy to make all the decisions regarding your health and finances. If your loved ones wanted to take on the deputyship at this stage, it could be costly for them.

First, they need to pay a fee to apply to be a deputy. The court may decide the case requires a hearing, in which case there’s an additional cost. If they are successful, they’ll need to pay an annual supervision fee plus another assessment fee if they’re a new deputy.

The courts may still refuse, and choose a council-appointed attorney instead. And while all this is happening, your family or partner won’t be able to sell any jointly-held assets, which could add to their financial strife.

Who should I choose as my attorneys?

You can choose more than one attorney. They can be friends, family members, a partner or a professional such as a solicitor. They must be over 18, have their full mental capacities, not be subject to bankruptcy or a debt relief order, and above all, they must be someone you trust with your affairs. They must also be willing to take on the task, so it’s essential to ask them first.

It’s advisable to seek professional help to ensure no mistakes are made.

What are the two types of LPA?

There are two types of Lasting Power of Attorney in England and Wales. You can choose to make one type, or both.

  • Health – your chosen attorneys will make decisions on your behalf over your personal welfare, day-to-day routine healthcare, and medical treatment. This can only be enacted after you have lost capacity and not before, unlike a finance LPA.
  • Finance – your attorneys can make decisions about money and property on your behalf, including paying any bills or debts, managing your bank account, selling a home, and collecting any benefits or pension. It can be enacted before you have lost capacity if you wish, otherwise it will come into effect when you lose capacity.

In Scotland you can make similar arrangements, although the process and names differ slightly. In Northern Ireland, these arrangements are only allowed to relate to finances and property.

Should I use a solicitor for lasting power of attorney?

You don’t need to ask a solicitor to set up a lasting power of attorney, but it’s advisable to seek professional help to ensure no mistakes are made. That’s why many people set one up alongside a will.

The Office of the Public Guardian (OPG) provides guidance on how to make and register a Lasting Power of Attorney in England and Wales. In Scotland, it’s the Office of the Public Guardian in Scotland, and you’ll find guidance for Northern Ireland on the NI Direct website.

Amber River Financial Planning

Setting up a Power of Attorney is an important foundational part of your overall financial plan. When considering your full financial landscape, an Amber River financial planner can help you put the necessary plan in place, and work with your solicitor to ensure all your financial interests are protected.

Get in touch

To speak to one of our team, arrange an appointment or find out more, call 0800 915 0000, or alternatively use our contact form here.