What is Power of Attorney?

At some point in our lives, we may be in a situation where we need a trusted person to make decisions for us regarding our finances or our care. This could be due to illness or an accident, but for most of us it will be advancing age or diagnosis of Dementia or Alzheimer’s. Power of Attorney documents allow you to appoint one or more trusted persons to look after your affairs in the event that you can’t make decisions by yourself anymore.

Read our guide on finding the correct Power of Attorney documents and how to make sure you fill them out properly.

2) Summary in 30 Seconds

  • You can view, download and print the Power of Attorney forms from the Public Guardian website, along with a free how-to guide
  • If you have a fairly straightforward situation, you may choose to fill out the forms and register Power of Attorney by yourself. However, some people choose to use a solicitor. 
  • As you can set specific parameters and restrictions in your L.P.A., think carefully about what things you would like your Attorney(s) to handle and what things you would prefer them not to.
30 seconds summary

2) What is Power of Attorney?

Power of Attorney is a legal term for when an individual is authorised to manage the financial or person affairs of someone else. This could be because:

  • They have given them this authority in order to handle their affairs under their supervision
  • They are going to be indisposed for an extended period of time.
  • They are physically unable to handle their affairs alone and need assistance.

The last one is the most commonplace reason why people create Power of Attorney. They may be concerned that an accident or illness will leave them unable to manage things. Or they may do so in advance of a degenerative illness like Dementia or Alzheimers. As these conditions may eventually leave a person without mental capacity to make decisions, they may decide in advance to create a document that gives a trusted person the ability to handle their affairs. This can not only give peace of mind, but also prevent many issues arising from not having an authorised Attorney in this role.

>So what exactly does “mental capacity” refer to? In this instance, it means someone’s ability to make specific decisions or perform specific actions – their decision-making ability. A person with Mental Capacity can:

  • Understand the available and relevant information and retain it
  • Evaluate and weigh up their options
  • Make a choice and communicate their decision
  • Do so at the relevant time

A person must have mental capacity in order to create Power of Attorney. If someone has already been diagnosed with Dementia, Alzheimers or some other impairment, it doesn’t necessarily mean they are not fit to create Power of Attorney. Mental capacity is not static – it can fluctuate. People can be better some days than others. A person may struggle with certain tasks but be capable of understanding what Power of Attorney is and the effect creating it would have.

If this is the situation for one of your family members, you may need to instruct a solicitor who specialises in this area. They can verify that your loved one has the requisite mental capacity to create Power of Attorney, and help you with the other formalities of registering the forms.

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3) Types of Power of Attorney

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As mentioned above, there are several types of Power of Attorney depending on what you need it for. 

  • Lasting Power of Attorney – Property and Financial. This gives your Attorney(s) authority to manage your money and property that you own.
  • Lasting Power of Attorney – Health and Welfare. This gives your Attorney(s) authority to manage your healthcare and general day-to-day living and care needs. This could include helping you make your own decisions regarding healthcare, treatment and general lifestyle choices.
  • Ordinary Power of Attorney. This allows you to appoint an Attorney, usually for a finite period of time, to handle specific duties on your behalf, relating to financial matters only. This is generally used when a person is going to be temporarily indisposed, such as if they are going abroad for an extended period or are undergoing medical treatment. The Power is only valid while the Donor has mental capacity. If at any point the Donor loses mental capacity, the Power will no longer be usable. 
  • Enduring Power of Attorney. E.P.A.s were replaced by Lasting Powers in 2007, although any E.P.A. created before that date is still usable. They differ in a few ways, as L.P.A.s ushered in some changes:
  1. L.P.A. Donors may retain capacity to make certain decisions and must be helped to do so wherever possible.
  2. E.P.A. Donors are effectively viewed as being entirely incapable of making any of their own decisions. 
  3. L.P.A.s allow the Donor to choose their own “Named Persons” (those who are to be notified when the forms are sent away to be registered). The E.P.A. provides a prescribed list of individuals who must be notified upon registration. 
  4. With the L.P.A., the Donor or Attorney(s) can register the forms at any time. For the E.P.A., Donor must only be registered once the Donor lacks capacity. 

    Having Power of Attorney for Property and Financial Affairs could include:

    • managing your bank accounts, investments, 
    • buying or selling property for you,
    •  receiving income on your behalf,
    •  paying bills, mortgages, rent, care home fees and other household expenses
    • Maintaining your property

    Having Power of Attorney for Health and Welfare could include:

    • Where you want to live
    • Who you are in contact with
    • Consenting/refusing medical treatment for you
    • What you eat, what you wear, your daily activities, and so on.

    Of course, depending on the Donor’s needs you may only perform some or none of these examples. Under the MCA 2005 guidelines, the Attorney(s) have a duty to help the Donor wherever possible to make their own decisions and to assist them in doing so. 

    Both forms allow you to request that your Attorney(s) handle specific tasks or duties, and they can also make specific restrictions where you do not want the Attorney to have involvement or control.

    Some restrictions might be:

    Property and Financial Affairs:

    • Requiring the forms to be registered only after you have lost capacity
    • Restricting their authority to only accessing specific assets
    • Requiring accounts to be prepared and/or audited by an independent 3rd party.
    • Instructions on how certain accounts or investments should be operated
    • Restricting on how capital can be spent, or how personal property can be used

    Health and Welfare:

    • Making stipulations as to who can visit you and whom you may visit
    • Stipulating where you may live or whom can live with you
    • Requiring that certain persons must be consulted before certain decisions are to be made
    • Requiring independent reviews as to your care or treatment
    • Add restrictions as to life-sustaining treatment and how this may be done
    • Require that records are kept relating to the decisions made

    This gives you a brief idea of the kind of parameters you can set within your L.P.A. to ensure that you would live the way you want to even after you need more help to make decisions. Or if you are going to be appointed as someone’s Attorney, the kinds of duties or responsibilities you could possibly be dealing with. 

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    5) Who Can Be an Attorney?

    Being appointed as a person’s Attorney is a big responsibility. You may have to handle a fair amount of administrative duties, be adept at managing finances, be able to liaise with different care bodies for the Donor’s treatment or care, and so on. Additionally, you have to at all times prioritise the needs of the Donor and act in their best interests, which may be a challenge if they are deteriorating physically or mentally.

    Therefore, not everyone may be suited or be able to be an Attorney. This is also why many people choose to appoint more than one Attorney, so that they can share the load and the responsibility does not land all on one person. The most common and likely choices for Attorney(s) are:

    • Spouse / Civil Partner
    • Other family member (usually adult child or sibling)
    • A close friend
    • A professional (ex., accountant or solicitor)

    A family member or close friend is chosen for obvious reasons: their proximity and knowledge of the Donor. A professional such a solicitor is advisable when there is a risk of family conflict. For example, where family members are likely to disagree regarding the care decisions of the Donor it can make Power of Attorney very difficult to operate. Using a professional not only removes these personal elements, but should conflict arise, a solicitor would be able to provide detailed records which can attest to disputes over care or treatment.

    When deciding who to appoint as your Attorney, it is important that they have these attributes:

    • Trusted by you, the Donor
    • Knowledge and understanding of you
    • Understands what the role is and what it would require of them
    • If there is more than one Attorney, that they can work well together

    The qualities that an Attorney for Health and Welfare matters needs may be quite different from an Attorney for Property and Financial affairs. Health and Welfare involves detailed knowledge as to the Donor’s preferred way of life: their lifestyle, their habits, their preferences as to medical care, what food they like to eat, who their friends are, and so forth. While Property and Welfare Attorneys are dealing more with admin and organising some finances: paying bills on time, receiving income for the Donor, keeping detailed accounts, creating a budget, etc. This should be taken into account when you appoint Attorney(s).

    If more than one Attorney is going to be appointed you will also need to decide how they are going to act together. You have a few options:

    • Acting solely. This means both Attorney(s) can make decisions for the Donor independently of one another and they don’t need the other to sign off on anything they do in respect of the Donor.
    • Acting jointly. This means that all decisions must be made together, and both Attorneys must sign any documents. 
    • Acting Jointly and Severally. This means that the Attorneys can make decisions both together and separately.
    • Acting Jointly in some, Severally in some. This means the Donor has stipulated which matters require being made either Jointly or Severally. 

    It can be complicated trying to decide what would work best, as there are advantages and disadvantages to them all. For example, Attorneys working solely may place a lot more responsibility on one of the Attorneys than the other. It also increases the risk of abuse or mismanagement. This can be solved by acting jointly, but it can be difficult making all decisions together, and if issues arise between the Attorneys the L.P.A. might become unworkable and have to be cancelled.

    Some questions will need to be answered to make these decisions. Such as, what disagreements might arise between the Attorneys? How will they be resolved? How can the Donor’s wishes and preferences be expressed in a way that is workable for the Attorneys?

    If you anticipate that you may run into issues such as these, you might need to seek legal help from a solicitor who specialises in this area. Once an L.P.A. is registered, it cannot be amended or changed. You need to ensure that you have properly considered the issues that could arise. With their professional expertise, a solicitor will be able to point out any areas or issues and help you find a way to express your wishes in a clear and concise way.

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    6) Who Needs Power of Attorney?

    So, who actually needs Power of Attorney? A great number of people who have Power of Attorney documents registered are elderly individuals with deteriorating health. They have the mental capacity to recognise that they are struggling and may need assistance in the very near future. This is often due to a diagnosis of Dementia or Alzheimer’s. Since Lasting Power stresses the importance of individuals making their own decisions for as long as possible, you have the ability to register the Lasting Power and still continue to live independently, perhaps with increasing involvement from your Attorney(s) as you get older or your illness progresses. Others will need extensive help immediately.

    So does this mean Lasting Power of Attorney is only for the elderly or for those will increasing infirmities?

    Not necessarily. 

    As Lasting Power forms can be created but don’t have to be registered straight away, creating Power of Attorney can also act as a safeguard for you and your family, at any age or stage of life.

    Power of Attorney may be beneficial to have in place if:

    • You have children. Like your Will, having Power of Attorney in place can be a security that your affairs will be taken care of in event that you can’t make decisions for yourself anymore.
    • You own a business. If you run a business, especially one with employees, you will want it to continue running even if you are not there to manage things. 
    • You are undergoing medical treatment. Unexpected things can occur during medical treatment, delaying your recovery or return to normal life. 
    • You are going to be abroad for an extended period of time. Emergencies while we are abroad can leave us unable to perform basic actions back home. COVID-19 left tens of thousands of people stranded around the globe. Having Power of Attorney in place can allow your Attorney(s) to manage your affairs in case you should find yourself abroad for an extended period of time. 
    • You have specific or complex medical needs. Even if you are able to manage your affairs independently, it could still be beneficial to have a trustworthy person appointed to step in if you should ever need it.

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    Did You Know?

    Many people think that your spouse, partner or next-of-kin has automatic rights to make decisions for your healthcare or handle your finances. This is not true. You will either need Power of Attorney or Deputyship to make decisions on their behalf.

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    6) Duties for Attorneys

    Perhaps you have been asked by a family member or close friend to be an Attorney for them. You may be wondering what this entails, and what possibility you might need to do for them in the future. Every situation is different, so the most important thing is to discuss this with the Donor. Some responsibilities Attorneys have include:

    • Acting in the Donor’s best interests. “Best Interests” in this context means making decisions according to the Donor’s preferences and wishes. It means always making choices to preserve their quality of life, maintain their dignity and allow them as much agency as possible. This might not always be in line with what you think is “best” in a situation, but what is in line with the Donor’s values and opinions, as well as making decisions that keep them safe from harm.
    • Keeping detailed records. This could be financial accounts or a detailed record of the decisions you’ve made for the Donor. This can be time-consuming, but it might be a stipulation from the Donor. 
    • Be capable and trustworthy. Just because you care about the Donor does not necessarily mean you might be prepared to take a very active role in their life, assisting them with daily tasks and weighty decisions. If you are appointed as a Property and Financial Affairs Attorney, It is also a very big responsibility to manage someone else’s finances. 
    • Act in good faith and help them to make decisions. If someone has limited capacity to make their own decisions, you will need patience to help them communicate their decisions as well as insight to know when to step in and take control of matters when they are not capable. As you may be dealing with a vulnerable individual, you have a big responsibility to uphold their rights even as you try to help them in a practical way. Overstepping of the duties outlined in MCA 2005 guidelines would be a very serious matter.