We should all be thinking about who we would want to make financial decisions on our behalf if we could no longer make them ourselves. Here’s how.
What is a power of attorney?
A power of attorney is a legal document that lets you give one or more person the power to make decisions and manage:
- your money and property, and/or
- your health and welfare.
As long as you’re aged 18 or over, you can set one up at any time, providing you’re able to weigh up information and make decisions yourself.
A power of attorney can help you with:
temporary situations. For example, you’re in hospital or abroad and need help with everyday tasks such as paying bills.
longer-term situations. For example, you want to plan for the unexpected or have been diagnosed with dementia and may lose the mental capacity to make your own decisions in future.
Power of attorney – terms explained
Lasting power of attorney (the subject of this guide) – an ongoing arrangement with no expiry date. It will allow the person/people you pick to make decisions on your behalf if you lose mental capacity.
Ordinary (or general) power of attorney – this is for when you only need help temporarily. It’s only valid as long as you have mental capacity.
Enduring power of attorneys were replaced in 2007 by lasting power of attorneys. See below (If you already have an enduring power of attorney) for more details.
- When you give authorisation to someone else to act on your behalf, you are the donor.
- The attorney is the person you choose to act on your behalf. Anyone with mental capacity who is aged 18 years or older can be an attorney. This includes a wife, husband, civil partner, partner, friend, family member or a professional such as a solicitor.
Mental capacity means the ability to understand the decisions you need to make, why you need to make them, and the likely outcome of your decisions.
If you’re not sure if someone has mental capacity to make their own decisions, there are more details on the NHS website.
How does a power of attorney work?
You complete the forms (either online or paper), giving all the details of who you want to act on your behalf.
When you’ve had these signed, you register the forms with the Office of the Public Guardian.
You keep the document safe and carry on making decisions in the usual way until it’s needed.
If and when your attorney needs to act on your behalf, they’ll give certified copies of the power of attorney to your bank and all the organisations they need to deal. This is to prove they’re legally authorised to act for you.
What can be done on my behalf with a lasting power of attorney?
There are two types of lasting power of attorney. You can get one or both. It’s normally a good idea to set up both at the same time.
Property and financial –this gives the person you choose the power to do things like:
- collect your benefits or pension
- pay bills, switch utility providers and sort out tax issues
- manage your bank or building society account, or insurance
- buy and sell investments
- sell your home
- give gifts to your relations, for example at birthdays and weddings.
Health and welfare – this gives the person you choose the power to make decisions about things like:
- moving into a care home
- medical care, including life-sustaining treatment
- your daily routine, for example, washing, dressing and eating.
Making sure your wishes are carried out
You can choose to use your power of attorney document to give your attorneys extra instructions or record your preferences. For example:
- my attorneys must consult a financial adviser before making investments over £10,000
- I’d like my pets to live with me for as long as possible. If I go into a care home, I’d like to take them with me.
Or, you can talk to your attorneys and explain how you’d like them to act for you. Your attorneys will then be free to make decisions they think are right, and they’ll know what you’d want.
When do I set up a lasting power of attorney?
The sooner the better.
It’s a lot harder and more expensive for someone to help you with your money and property if you’ve already lost mental capacity.
It’s really important to get it all set up in advance. Life is uncertain, and you never know when something like an accident or a stroke might happen.
Also, it takes between eight and ten weeks to register a lasting power of attorney. So you don’t want to leave it to the last minute.
If you want to talk to someone about whether you should set up a lasting power of attorney now, contact the Office of the Public Guardian.
You can email them using email@example.com or speak to them on:
Telephone: 0200 456 0300
Textphone: 0115 934 2778
It’s not free to call, so make sure you check how much it will cost you before calling.
You can also call us free on 0800 138 7777.
Did you know?
If you’re married or in a civil partnership and lose mental capacity to make a specific decision – your partner won’t automatically be allowed to make that decision on your behalf without a lasting power of attorney.
Choosing someone to act on your behalf
Being an attorney is a responsible role and it’s important to think carefully about who to choose.
Choose someone you trust completely –you need to really trust whoever you choose as they will be making serious decisions for you. Most people choose close family members or friends. You could also choose a company, such as a bank, but this can be expensive.
Make sure they’re willing to act for you – you need to make discuss with them what you’ll want them to do. They need to know what’s involved, what your wishes are and where all your paperwork is.
Consider age –if you’re older, be wary of choosing someone who is a similar age as you (or older). They might not end up being the best person to act for you, if and when you need their help, because of their own health issues.
Choosing more than one person to act on your behalf
- You don’t have to leave people out of the process.
- It can spread the work.
- They may disagree on what actions to take.
- Depending on their location, it might be tricky for them to meet to sign documents.
If you choose to have more than one person representing your interests, you can choose for them to act:
Jointly – they must always make decisions together. It means that if one of them dies, the power of attorney would become invalid (unless you’ve appointed replacements).
Jointly and severally – they make some decisions together and some individually. This means if one of them dies, the power of attorney would still be valid.
Jointly for some decisions and severally for everything else – certain decisions will need to be made together. You choose what these are when you set up the power of attorney. If one can no longer act on your behalf or dies, your remaining attorneys won’t be able to make any of the joint decisions (unless you’ve appointed replacements).
Unspecified – if you choose two or more attorneys, but don’t complete the section saying how they should act, the default position in law is that they must act jointly.
Choosing replacement attorneys
You can choose a back-up attorney. This should be someone you really trust. They would take over making decisions if one of the ‘original’ attorneys were to resign from the lasting power of attorney or die.
Choosing a replacement attorney protects against the power of attorney being cancelled, if the original ones can no longer act.
Replacement attorneys have the same level of authority as the attorneys they replace. They usually step in as soon as one of your original attorneys stops acting for you.
How do I set up a lasting power of attorney?
When you’ve had all the important discussions, spoken to the people you want to represent you and potentially sought advice, you need to:
- Go to the GOV.UK website – the online service will provide the forms and guide you through the process.
- Choose your attorneys and make sure you have their full names, addresses and dates of birth.
- Choose someone to act as a ‘certificate provider’. This is an impartial person who is there to protect your interests and check you’re acting of your own free will.
- Decide whether you want to let anyone else know about the lasting power of attorney. This might be friends or family members who you’re not asking to act as your attorney, but you’d like to give them a chance to raise any concerns.
- Get and print and signatures, and submit the forms to the Office of the Public Guardian with payment. They will check everything has been done properly and return the form to you if there are any errors you need to fix.
- You’ll then get a stamped copy of the power of attorney, showing it’s been accepted and registered.
Do you need legal advice to set up a lasting power of attorney?
You don’t have to use a solicitor but you might want to use one if you’re struggling with the process or want someone to check your form.
You can search for solicitors who specialise in this area on the Law Society online directory.
How much does it cost to set up a lasting power of attorney?
You will need to pay £82 for each lasting power of attorney.
If you want to register a property and financial affairs lasting power of attorney, as well as health and welfare lasting power of attorney, it will cost you £164.
Fee exemptions and reductions
Setting up a power of attorney is free (known as an exemption) if you’re on certain mean-tested benefits such as Income Support.
If you can’t get it free, you might be able to get a 50% reduction in the fee if you earn less than £12,000 a year.
The rules for who qualifies are listed in the form on the GOV.UK website.
How am I protected from things going wrong?
Your attorney must:
- support you to make your own decisions
- make all decisions in your best interests
- consider your wishes and feelings.
If they don’t do these things, they could be referred to the Court of Protection.
Find out more about the Court of Protection on the GOV.UK website.
Cancelling a lasting power of attorney
As long as you still have mental capacity, you can cancel a lasting power of attorney at any time.
For instructions on cancelling a lasting power of attorney, go to the GOV.UK website.
After you have lost capacity, the lasting power of attorney can only be cancelled with the agreement of the Court of Protection.
If you already have an enduring power of attorney
In England and Wales, if you’ve set up a lasting power of attorney before 1 October 2007, it will be called an enduring power of attorney. You can’t set up this type anymore. But if you have one, and it was filled in correctly, you can register and use it (as long as you still have mental capacity).
However, bear in mind that it will only cover decisions about property and financial affairs. If you want to appoint someone to make decisions about your health and welfare, you’ll need to set up a health and welfare lasting power of attorney.
When it’s set up, you’ll need to cancel your existing enduring power of attorney (so there’s no confusion) and let your attorneys know.
To find out more about how to use or cancel an existing enduring power of attorney, go to the GOV.UK website.
Too late to set up a power of attorney?
If someone no longer has the capacity to make their own decisions, you will need to apply to the Court of Protection. They may be able to appoint a ‘deputy’ to make decisions on their behalf.
Find out more on the GOV.UK website.
For more information about what happens if you don’t have a power of attorney, see the Age UK websiteopens in new window.