The process is relatively inexpensive and simple but requires an understanding of the different options. In this article, we will explain the difference between Ordinary Power of Attorney and Lasting Power of Attorney (LPA), how to register an LPA and the consequences of either choice to help you decide which one might be better suited to your needs.
What is a Power of Attorney?
A power of attorney is a legal document that allows you, the donor, to appoint people, the attorneys, to make medical and/or financial decisions on your behalf. An Ordinary Power of Attorney is a temporary legal document allowing attorneys to make financial decisions on your behalf for a specified period, which ends if you lose mental capacity. A Lasting Power of Attorney typically comes into force if you become mentally incapacitated to make your own decisions, but it can come into effect immediately in some circumstances.
What is an Ordinary Power of Attorney?
An Ordinary Power of Attorney is a way to give someone the right to look after your financial affairs temporarily. This type of Power of Attorney is not designed for those who believe they may develop a condition that could lead to mental incapacity. This is because an Ordinary Power of Attorney only remains in power so long as you have mental capacity.
Instead, this is an option in limited scenarios, such as if you have a physical illness or injury or if you're planning on living abroad for a long period. This type of Power of Attorney can be enforced as soon as the donor signs it. It does not need to be registered with the Office of the Public Guardian and can come into force as soon as you sign it. However, it does require specific wording to be effective.
While it's fairly straightforward to create, if you have more complex requirements, such as if you want to create it for a specified period or if you want to limit the powers of your attorney, it may be worth speaking to a solicitor to ensure you have a document that meets your needs. Solicitor fees for this type of document start from around £500.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney can assign permissions to your attorney to cover decisions about your health and welfare as well as your finances when you lose mental capacity. This is done through two types of LPA - a 'Property and Finance Power of Attorney' and a 'Health and Welfare Power of Attorney'.
An attorney, once nominated and registered through this process, can usually liaise with health and care professionals on behalf of the donor if they've lost mental capacity They could also access their bank accounts and other financial products to make financial transactions for them where needed.
In most cases, attorneys are limited to assuming their powers only in cases where the donor has lost the mental capacity to act for themselves - we describe these powers further in this article. In some limited cases, Property and Finance Power of Attorneys can make decisions for the donor with immediate effect, i.e. before the donor losing mental capacity. This only happens if the donor has given permission and the Lasting Power of Attorney document expressly states this is the case.
A Lasting Power of Attorney has no end date, so it is an instruction of permission from the donor for the attorney to make decisions on their behalf for the foreseeable future. Of course, donors can make changes to this if they are of sound mental capacity. Enduring power of attorneys are similar, except they are not registered until the donor loses mental capacity, whereas an LPA is registered beforehand. Enduring power of attorneys were replaced with LPAs in October 2007.
Lasting Powers of Attorney can be created for health and welfare decisions as well as financial decisions. As Lasting Powers of Attorney are far more complex and have more far-reaching consequences due to the mental capacity component, we deal with them for the majority of the article.
What is a Lasting Power of Attorney for health and welfare decisions?
A health and welfare power of attorney is limited to making decisions about your health, care and daily living which can include matters such as:
- Where you live
- Who takes care of you
- What you eat
- What activities you do
- The care you receive
What is a Lasting Power of Attorney for property and financial affairs?
A financial power of attorney would give the attorney the ability to carry out financial transactions and they could make financial decisions and act on your behalf including:
- Sale or purchase of a property
- Paying bills
- Managing investments
- Arranging repairs to property
How does a Lasting Power of Attorney work?
A Lasting Power of Attorney essentially acts as a certificate for the person(s) you choose to be attorneys to use if it becomes necessary to make decisions for you. They may need to present the certificate to medical staff, your bank or any other organisation they are dealing with on your behalf.
How to arrange a Lasting Power of Attorney
The Office of The Public Guardian facilitates the registration of a Lasting Power of Attorney. You can visit the government website section called "Make, register or end a lasting power of attorney" where you can either download the forms that are needed to do this or you can simply follow the links within the site to complete them online instead. The site provides step-by-step instructions on how to arrange your power of attorney.
The registration process takes around 10 weeks and can take longer if there are any mistakes. You will also have to notify the 'people to be told' listed on your power of attorney so that they have time to raise concerns if they need to.
How much does a Lasting Power of Attorney cost?
Creating a Power of Attorney costs nothing, but in order for it to be used, it must be registered with The Office of Public Guardian, and this costs £82.
Power of Attorney - summary of charges
| Transaction | Cost |
| Arrange one power of attorney (financial or health) | £82.00 |
| Arrange both power of attorneys (financial and health) | £164.00 |
| Make a change within 3 months of registering or a repeat application | £41.00 |
| Certified copy of a power of attorney | £35.00 |
If you are in receipt of certain state benefits then you may qualify for a reduction or an exemption to the cost of creating a power of attorney. You can find more specific information regarding reductions and exemptions in the Office of the Public Guardian LPA and EPA fees document.
Can you organise an LPA without a solicitor?
You don't need to use a solicitor to organise a lasting power of attorney. If your affairs are straightforward, following the process via the government website is sufficient. That said, if you have a more complex situation or you're unsure about the process, getting the help of a solicitor could be a good idea.
The costs for arranging your Power of Attorney with a solicitor will vary widely from one solicitor to the next but this could add anywhere between £250 and £600 (sometimes, even more) to the registration fee, which is £82 for a single power of attorney. Because the costs vary so much, it's usually a good idea to get a few quotes before making your choice.
Who can override an LPA?
Anyone can object to the registration of a Power of Attorney, but this would have to be done through the Office of the Public Guardian (OPG) and/or the Court of Protection. An objection can usually be made if the person objecting believes the:
- donor lacked mental capacity when arranging the power of attorney
- attorney lacks mental capacity to carry out their responsibilities
- donor has regained mental capacity
- attorney is unfit due to bankruptcy or is under a debt relief order
Cases, where fraud is suspected, can also be raised with the OPG.
What is mental capacity?
Mental capacity is the ability to make decisions about, amongst other things, financial and personal matters. Although a lack of mental capacity requires a person to demonstrate an inability to make decisions, it is important to note that it is not defined by someone’s need to take extra time to make such decisions. For example, if a person with dementia is unable to make decisions quickly but, given time, is able to do so, they usually would not demonstrate a lack of mental capacity.
How is mental capacity assessed?
Mental capacity is assessed using the guidance contained within the Mental Capacity Act (MCA), which outlines several criteria that fulfil the requirements for a person to be deemed to present with a lack of mental capacity to make decisions.
Who decides if someone lacks mental capacity?
The person who would carry out an assessment of mental capacity should have access to the Mental Capacity Act and would be referred to as an Assessor.
Assessors can be anyone – for example, family members, a care worker, a care service manager, a nurse, a doctor or a social worker. It is the responsibility of everyone who makes decisions on behalf of others to recognise their role and responsibilities under the code of practice.
The MCA outlines that a person is unable to make a decision if they are unable:
- to understand the information relevant to the decision
- to retain that information
- to use or weigh that information as part of the process of making the decision
- to communicate their decision (whether by talking, using sign language or any other means)
Power of Attorney: Frequently Asked Questions
Below, we outline some of the frequently asked questions associated with creating a Power of Attorney.
Who should arrange a Power of Attorney?
Anyone can and should consider arranging a Lasting Power of Attorney (LPA) to ensure that the person acting for them is someone they selected if they lose mental capacity. It is not unusual for people to arrange Power of Attorney for an interim period while they cannot manage their affairs - they may be taking a long holiday, be unwell or simply require someone else to step in for them for other reasons. This can be done via an ordinary Power of Attorney.
How do I prove I have Power of Attorney?
If the LPA was registered before January 1, 2016, you'll need to show the paper LPA to people or organisations who want proof. If it was registered after this date, you'll be able to use your online LPA account to generate an access code for the LPA. Companies can use this code to view a summary of the LPA which will include details such as whether the LPA is still valid and registered, the attorneys' details, the donor's details, and information such as the donor's preferences and instructions.
Can an LPA holder transfer money to themselves?
Yes, attorneys are able to transfer money to themselves but rules prevent them from doing so unless the transfer is in the best interests of the donor and maintains their ability to afford ongoing care and other needs. Attorneys are required to keep records of financial transfers which can be checked by the Office of the Public Guardian as well as the Court of Protection.
Can a Power of Attorney change a Will?
It is possible for an attorney to change a Will but they would have to apply to the Court of Protection with a body of evidence to support either changing an existing will or creating one where one was not in place. However, ultimately any change or creation of a Will can only be done if the donor does not have the mental capacity to do so and must be in the interests of the donor.
Do I need probate if I have an LPA?
Usually, an LPA ends if the donor dies, so in practical terms, the assets and belongings of the deceased donor, including any assets under a power of attorney, would become part of the deceased's estate. The executors of the estate can be the same as the attorneys if the donor nominated the same people, in which case they would act for the estate at this point.
Power of Attorney overview
To sum up, a Power of Attorney is a document you should consider setting up while you still have the mental capacity to do so. Most people could benefit from this arrangement as it allows you to decide who will make decisions on your behalf if you don't have the mental capacity to do so.
Registering a Lasting Power of Attorney costs £82 for each type - financial and health and welfare. The Power of Attorney ends when you die.
In some cases, you can create what is known as an ordinary Power of Attorney. This allows your attorney to make certain financial decisions on your behalf while you still have mental capacity. Typically, this is a temporary arrangement, for example if you have a serious physical illness or if you're spending a prolonged period abroad.
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