What They Are, Why They Matter and How They Work

A Lasting Power of Attorney (LPA) is an important part of planning for the future. It allows you to choose people you trust to make decisions on your behalf if you are unable to make those decisions yourself.

Many people understand the importance of making a Will, but LPAs are sometimes overlooked. A Will deals with what happens to your estate after you die. An LPA deals with important decisions that may need to be made during your lifetime if you are unable to make them yourself.

There are two types of LPA in England and Wales: Property and Financial Affairs and Health and Welfare. You can choose to make one or both.

This guide explains how LPAs work, who can make one, who you can appoint as an attorney and what could happen if you lose mental capacity without having an LPA in place.

What is a Lasting Power of Attorney?

A Lasting Power of Attorney is a legal document that allows you to appoint one or more people, known as your attorneys, to make decisions on your behalf.

The person making the LPA is known as the donor.

An LPA can give you greater control over who will be able to help you if, in the future, you are unable to make certain decisions yourself.

Importantly, you can only make an LPA while you have the mental capacity to understand what you are doing and to make the relevant decisions. You must be aged 18 or over.

This is one of the reasons why LPAs are generally considered as part of planning ahead, rather than something to deal with only when a problem arises or when Care of some sort is immenent.

What are the two types of Lasting Power of Attorney?

There are two different types of LPA.

1. Property and Financial Affairs LPA

A Property and Financial Affairs LPA allows your attorneys to make decisions about your money and property.

Depending on the authority you give them, this can include matters such as:

• managing bank and building society accounts

• paying household and other bills

• dealing with pensions and benefits

• managing investments

• buying or selling property

• dealing with other financial affairs.

A Property and Financial Affairs LPA can be used while you still have mental capacity if you have chosen for your attorneys to have that authority and you give them permission to act. Alternatively, you can structure the LPA so that it is intended to be used only if you lose mental capacity.

2. Health and Welfare LPA

A Health and Welfare LPA covers decisions about your personal welfare.

Depending on the circumstances, this can include decisions about:

• your daily routine and care

• where you should live

• medical treatment

• care arrangements

• life-sustaining treatment, if you have given your attorneys the relevant authority.

A Health and Welfare LPA can only be used when you are unable to make the relevant decision yourself because you lack mental capacity.

You can make either type of LPA independently, or you can make both.

Why might I need a Lasting Power of Attorney?

It is impossible to know exactly what the future holds.

You may remain capable of managing your own affairs for the rest of your life. Alternatively, an accident, illness or condition such as dementia could affect your ability to make decisions at some point in the future.

An LPA allows you to make arrangements before that happens.

It means you can decide who you would want to help you and give them the appropriate legal authority to act on your behalf.

Without an LPA, your family does not automatically acquire the legal authority to deal with your finances simply because they are your spouse, civil partner, child or next of kin. If someone loses mental capacity without an appropriate LPA in place, it may be necessary for someone else to apply to the Court of Protection to become a deputy.

That can introduce a more formal process at what may already be a difficult time for a family.

Who can I appoint as my attorney?

You can appoint someone you trust to act as your attorney.

An attorney must generally be aged 18 or over and have mental capacity themselves. They could be a spouse or partner, another family member, a close friend or, in some circumstances, a professional. An attorney does not have to be a solicitor.

Choosing an attorney is therefore an important decision.

It is worth thinking about whether the person:

• understands you and your wishes

• is someone you trust completely

• would be willing to take on the responsibility

• would be able to deal with financial or personal decisions if necessary

• would respect your wishes and act in your best interests.

You should also consider whether you want to appoint more than one attorney.

Can I appoint more than one attorney?

Yes. You can appoint more than one attorney.

If you do, you need to decide how you want them to act.

Attorneys can be appointed so that they act jointly and severally, meaning they can make decisions independently or together. Alternatively, they can be appointed jointly, meaning that they must all agree when making decisions.

It is also possible to structure the LPA so that some decisions must be made jointly while others can be made jointly and severally.

You can also nominate replacement attorneys who may step in if an original attorney can no longer act.

These choices are worth considering carefully because the way the LPA is structured can affect how practical it is for your attorneys to use in the future.

What can an attorney actually do?

An attorney does not simply take control of everything and make whatever decisions they want.

Attorneys have legal responsibilities. They must follow any instructions and restrictions included in the LPA, act in the donor's best interests and support the donor to make their own decisions wherever possible. They must also keep the donor's money and property separate from their own, subject to limited exceptions, and keep appropriate records.

Being appointed as an attorney is therefore a responsibility rather than simply a privilege.

If you are considering appointing someone, it is worth discussing the role with them beforehand so that they understand what may be expected of them.

When does a Lasting Power of Attorney start?

An LPA must be registered with the Office of the Public Guardian before it can be used.

For Property and Financial Affairs LPAs, you can choose whether your attorneys can act as soon as the LPA is registered, with your permission, or only if you subsequently lose mental capacity.

A Health and Welfare LPA is different. Your attorneys can only use it when you lack the mental capacity to make the relevant decision yourself.

This distinction is important because having a Property and Financial Affairs LPA does not necessarily mean that your attorney automatically takes over your finances as soon as it is registered.

What happens if I lose mental capacity without an LPA?

This is one of the most important reasons to think about LPAs as part of your wider estate planning.

If you lose mental capacity and have not made an appropriate LPA, you cannot simply make one afterwards. The ability to make an LPA depends on having the mental capacity to understand and make the decision at the time it is created.

In some circumstances, someone may need to apply to the Court of Protection to become a deputy.

A deputy is appointed by the Court of Protection and is authorised to make decisions on behalf of someone who lacks mental capacity. The court order determines what the deputy is authorised to do.

This is different from choosing your own attorneys in advance.

It is also worth remembering that the need for an LPA is not limited to old age. An accident or serious illness can affect someone's ability to make decisions at any stage of adult life.

Is an LPA the same as a Will?

No. A Will and an LPA perform very different roles.

A Will deals with your estate after your death - read more about Wills HERE 

An LPA deals with decisions during your lifetime.

For example, your Will may determine who inherits your home, savings and other assets after your death. Your Property and Financial Affairs LPA could allow someone you have chosen to manage your finances or deal with your property while you are alive if you are unable to do so yourself.

Your Health and Welfare LPA can deal with decisions about your care, living arrangements and certain medical treatment while you are alive.

For many people, therefore, a Will and LPAs form complementary parts of a wider estate and lifetime planning strategy.

How much does a Lasting Power of Attorney cost?

The current application fee to register an LPA in England and Wales is £92 for each LPA. If you make both a Property and Financial Affairs LPA and a Health and Welfare LPA, the standard registration fee is therefore £184 in total.

Fee reductions and exemptions may be available depending on your circumstances.

The Office of the Public Guardian currently states that LPA applications take around 8 to 10 weeks to process and register, including the statutory waiting period, provided there are no problems with the application - but this can be longer!

If you are considering making an LPA, it is therefore sensible not to leave the process until you urgently need someone else to act for you.

When should I make a Lasting Power of Attorney?

There is no particular age at which you need to make an LPA - indeed Martin Lewis, the Money Saving Expert advocates all people have these crucial documents in place as early as possible. 

The more useful question is whether you would want someone you trust to be able to help make decisions for you if you were unable to make them yourself.

For some people, this will be something they consider alongside making or updating their Will. For others, it may become particularly relevant following a change in family circumstances, retirement, a health concern or simply a desire to put their affairs in order.

The important point is that an LPA needs to be made while you still have the mental capacity to make it.

Common misconceptions about Lasting Powers of Attorney

“My spouse can automatically deal with everything if I lose capacity.”

Not necessarily.

Being someone's spouse, partner, child or next of kin does not automatically give you the legal authority to make all decisions on their behalf. An appropriate LPA can provide that authority.

“An LPA means I've lost control of my affairs.”

No.

An LPA allows you to decide in advance who you want to appoint and how you want them to act. You can include preferences and instructions within the document.

In particular, a Property and Financial Affairs LPA can be structured so that attorneys only act in specified circumstances, subject to the rules governing LPAs.

“LPAs are only for elderly people.”

No.

An LPA is about planning for the possibility that you may be unable to make decisions in the future. That can happen as a result of illness or accident at any age.

“My attorney can do whatever they want with my money.”

No.

Attorneys have legal duties and must act in the donor's best interests. They must follow relevant instructions and restrictions and keep appropriate records. They must not use their position to benefit themselves improperly.

Lasting Powers of Attorney as part of your wider estate planning

Estate planning is not simply about deciding who inherits your estate when you die.

Good planning also considers what happens during your lifetime.

Your Will can set out your wishes for your estate after your death. LPAs can help ensure that appropriate people are able to make decisions for you during your lifetime if you are unable to make them yourself.

Depending on your circumstances, wider planning may also involve trusts, succession planning, business planning, protection arrangements and other measures.

The appropriate arrangements will depend on your individual circumstances, family and objectives. There is no single approach that is right for everyone.

Frequently asked questions about Lasting Powers of Attorney

Can I make both types of LPA?

Yes. You can make both a Property and Financial Affairs LPA and a Health and Welfare LPA. They are separate legal documents and each must be registered.

Can I appoint my children as attorneys?

Yes, provided they are aged 18 or over and have mental capacity. You can appoint one child, several children or other people you trust.

Can my attorney sell my house?

A Property and Financial Affairs LPA can give an attorney authority to deal with property, including buying or selling your home, subject to the terms of the LPA and the attorney's legal duties.

Can an attorney make decisions about medical treatment?

A Health and Welfare LPA can give attorneys authority over certain health and welfare decisions, including medical treatment and, if specifically authorised, life-sustaining treatment.

Does an LPA replace my Will?

No. An LPA and a Will deal with different aspects of your affairs. An LPA operates during your lifetime, while your Will generally takes effect after your death.

What happens to my LPA when I die?

An LPA ends when the donor dies. From that point, the donor's estate is dealt with by their personal representatives in accordance with the Will or, if there is no Will, the rules of intestacy.

How Together We Plan can help

Lasting Powers of Attorney are an important part of putting a sensible plan in place for the future, but they are only one part of the wider picture.

At Together We Plan, we take the time to understand your circumstances, your family and what you are trying to achieve before recommending the arrangements that may be appropriate for you.

If you are reviewing your Will, considering LPAs or simply want to understand whether your existing arrangements still reflect your circumstances, we would be happy to have a conversation with you.

There is no obligation to proceed. The first step is simply to understand where you are now and what you may need to consider next.

If you would like to discuss your estate planning with Together We Plan, please get in touch with us to arrange an initial conversation.

Or - why not use our free Planning Assessment tool to help find the most appropriate planning for you and your family.

This article is intended to provide general information about Lasting Powers of Attorney in England and Wales. It is not a substitute for advice based on your individual circumstances. The law and official procedures can change, so the current guidance from the Office of the Public Guardian should be checked where appropriate.