Under the laws of England and Wales, there is no one single Power of Attorney that covers everything. There are different forms of Power of Attorney that exist and which address specific needs. Each Power of Attorney has its own scope, purpose, and legal requirements and understanding these distinctions is essential to ensure that your affairs are managed effectively and according to your wishes, should you be unable to make decisions for yourself.
What Is a Power of Attorney?
A Power of Attorney is a legal instrument that allows you (the donor) to appoint one or more trusted individuals (your attorneys) to act and make decisions on your behalf. The authority granted under a Power of Attorney can range from handling your day-to-day financial matters, to making significant medical and welfare decisions.
The Main Types of Power of Attorney
General Power of Attorney (GPAs)
A GPA is suitable for situations where the donor wants to authorise someone to act on their behalf while they still have mental capacity however, it becomes invalid if the donor loses mental capacity.
It is typically used in commercial, transactional contexts and often in temporary situations. They can be used in a variety of situations but most commonly for short-term arrangements such as, enabling another person to execute documents on the donor’s behalf. They can also be used if the donor needs someone to handle their affairs for a limited period if they are unwell or abroad.
Lasting Power of Attorney (LPAs)
LPAs are the most comprehensive form of Power of Attorney available, and they were introduced by the Mental Capacity Act 2005. They enable the donor to plan for a time when they may no longer be able to make decisions themselves. LPAs allow chosen attorneys to continue acting for the donor even if they lose mental capacity.
There are two types of LPA, and both must be registered by the Office of the Public Guardian (OPG) before they can be used. The two types of LPA are:
An LPA granting authority in relation to the donor’s Property and Financial Affairs. This LPA authorises an attorney to manage the donor’s property and financial matters. The donor decides whether they want this LPA to be used immediately once registered (and with their consent), or only if they lose mental capacity. The types of decisions that an attorney can make under this LPA include the following:
Operating bank accounts;
Paying bills;
Dealing with tax and benefits; and
Buying or selling property.
An LPA granting authority in relation to the donor’s Health and Welfare. This LPA can only be used if the donor loses mental capacity and it allows the attorney to make decisions about the donor’s healthcare and personal welfare. The types of decisions that an attorney can make under this LPA include the following:
Medical treatment and care plans;
Living arrangements (e.g., moving into a care home);
Daily care, such as diet and routine; and
Life-sustaining treatment (if authority has been given to the attorney).
These two LPAs are legally distinct documents but creating both ensures that attorneys can act in relation to both the donor’s financial affairs and personal welfare.
Enduring Power of Attorney (EPAs)
EPAs were replaced by LPAs in October 2007, following the implementation of the Mental Capacity Act 2005. While it is no longer possible to make a new EPA, existing EPAs made and signed before 1 October 2007 remain valid. EPAs only cover property and financial matters and must be registered with the OPG if the donor begins to lose or has lost mental capacity.
Why is there not a Single Power of Attorney for Everything?
The law makes a deliberate distinction between decisions that relate to financial matters and health and welfare to ensure the following:
That there are clear limits on the authority granted to each attorney;
To provide stronger protection of the donor’s rights and interests;
To provide flexibility by appointing different individuals for different responsibilities; and
To provide appropriate legal safeguards in sensitive areas such as healthcare and personal welfare.
There is no single Power of Attorney that covers every aspect of your affairs. However, by putting in place the correct combination of legal documents, you can ensure that your chosen attorneys are authorised to act in all areas that matter, both now and in the future.
Establishing the appropriate Powers of Attorney provides clarity, control, and reassurance that your affairs will be handled in the way you want, even if you are no longer able to make decisions yourself.
Because the process involves important legal and practical considerations, it is strongly recommended that you seek professional legal advice to ensure your instructions are clear, lawful and enforceable. By taking these steps now, you can protect your interests and give your loved ones the authority and guidance they may one day need.
If you would like to discuss Powers of Attorney and how we may be able to help, please give our friendly team a call on 0116 212 1000 or 01858 445 480 or complete our Contact Us form.
