Giving someone a Power of Attorney provides them with a legal right to make your major
financial, health and care decisions for you.
Typically, Powers Of Attorney (POA’s) are granted when someone is aware they will soon no
longer be able to make major decisions with their own best interests at heart, it is at this point these powers are entrusted with someone close to the individual to carry out their decisions for them.
Not Always Worst-Case Scenario (Ordinary)
It is entirely possible to create a power of attorney which is “ordinary”, where someone can
conduct your financial affairs for you regardless of your mental state.
If you were about to take a long sabbatical for example, and know you won’t be able to fulfil
your bills at home. Then, you can create a POA with this purpose in mind.
You are able to limit their access and responsibilities, but must bear in mind that this is only
active while you have mental capacity to make decisions for yourself, so, in the event you are
creating a POA for purely physical reasons (you can’t get out as much, so wish to grant
someone access to your accounts) you must also create a Lasting Power of Attorney in the
event you lose mental capacity, too.
The Relevance of “Mental Capacity” (Lasting)
If you are aware you may not be able to make competent financial or health in the near future, it is an intelligent idea to grant one or more people your Lasting Powers of Attorney.
This will mean that, as soon as you have lost mental capacity, the individual(s) will be granted
the right to make major decisions for you. There are two types of LPA, one for care and health, and the other for finance.
In the case of dementia, there comes a point for many individuals suffering with it where they
are no longer able to make decisions for themselves, more specifically, decisions that are in
their own best interests. So, with the amount of care you may need in mind, you could have
one LPA for health and care, and the other for finance, allowing them to strike the necessary
balance between your available funds and required level of care.
“Lasting Or Enduring?"
A lasting power of Attorney provides the right for individuals to make decisions on your behalf over your finance and health, and comes into effect if you’re no longer able to or wish to make decisions for yourself.
Enduring Power of Attorneys gives people the right to make decisions on your behalf over
your property and financial affairs, and also comes into effect if you lose mental capacity.
Importantly the EPA was replaced by the LPA in October of 2007, but if you made and signed an EPA before 1st October 2007, it should remain valid, but this should always be checked.
LPA for Financial Decisions
When it comes to your chosen LPA for your Finances, you have the choice between them
having immediate rights, or for them to only come into effect when you lose mental capacity.
Typically, a financial LPA will care for: asset purchase and sales, mortgage payments,
investments, bill paying and property repairs.
You can make restrictions on what they are and aren’t able to do, and it should be made clear that their role is to also keep accounts on what is done with your money. You also have every right to request the full accounts whenever you like, and can also organise for your solicitor to receive copies, as an additional form of protection.
LPA for Health & Care Decisions
Your LPA for your health and care can only be used when you have lost mental capacity, and
they will typically handle things like: where you should live, what your required medical care is,what you should eat, and what your social calendar should look like.
You are also able to provide special permissions for life saving treatments and other decisions to your health and care LPA.