What is the difference between a Power of Attorney and a Lasting Power of Attorney?

There are different scenarios where you may need a power of attorney. It may be a temporary solution or you may need it to be in place for a longer period of time.

When making your LPA, if you want both your health and welfare as well as your finances covered, you will need two separate LPA’s.

What is the difference between a power of attorney and a lasting power of attorney?

How do you know which one you need?

Ordinary power of attorney

An ordinary power of attorney is only valid whilst you still have mental capacity. It is a legal document that authorises one or more people that you choose to handle your finances.

You are still able to make decisions for yourself and you can limit the decisions that your attorney(s) are able to make.

For example, you may want to only authorise them to deal with only the selling of your properties.

Typically an ordinary power of attorney is for a shorter time frame than a lasting power of attorney

Lasting power of attorney

There are two types of lasting power of attorneys and both of these are typically actioned once you lose mental capacity. Whether this be through illness, ageing or a disability.

It works in the same way as an ordinary power of attorney. You can choose one or more people to make decisions on your behalf. 

Health and Welfare

A health and welfare LPA allows someone to make decisions regarding your health and daily life.

For example, those people who hold your health and welfare power of attorney can

  • Make decisions regarding your medical care.
  • Decide where you live
  • Plan your daily activities such as eating and dressing. 
  • Organise your social activities.
  • Make plans for your end of life care. 

Finance and Property

A finance and property LPA allows someone to make decisions and handle your finances and any properties that you own. 

For example, those people who hold your finance and property power of attorney can

  • Pay your bills including your mortgage
  • Handle your bank accounts.
  • Arrange repairs on your properties
  • Invest your money
  • Sell any of your properties. 

You can choose to have your finance and property LPA come into effect at any point once you have registered it to take effect. Whereas with a health and welfare LPA, this will only be effective once you lose mental capacity.

Although it should be created and registered before this point to ensure there are no delays and your wellbeing is always looked after. 

What is mental capacity?

When we talk about power of attorneys, the words mental capacity are used a lot. This simply means that you are able to make decisions and communicate these for yourself. That you also understand the consequences of these decisions.

Just because someone cannot communicate does not automatically mean that they lack mental capacity.

When creating your power of attorney, you will need a certificate provider who will confirm that you have full mental capacity. Also that the decisions you are making are your own and that you have not been pressured into making them.

Your certificate provider must be – 

  • Over the age of 18
  • A professional such as a Doctor, a Solicitor or a Social worker. 

or 

  • Someone you have known for over two years who is not a family member of yourself or your attorney(s)
  • Someone that is not a business partner or employee of either yourself or your attorney(s)
  • Someone that is not the manager or employee of a care home where you or a family member of yours resides. 

How do I know which power of attorney I need? 

If you know that your power of attorney is for a specific amount of time. For example, if you are going into hospital and will need someone to handle your financial affairs whilst you are away. Then an ordinary power of attorney would be the best option.

However, if you are planning for the future and you want the peace of mind that if you ever do lose mental capacity. That there will already be plans in place and people that will have your best interests at heart. Then a lasting power of attorney would be more beneficial.

When making your LPA, if you want both your health and welfare as well as your finances covered, you will need two separate LPA’s. 

If you are still unsure which power of attorney would be the best option. Then contacting a Solicitor would be the next step.

Although you can create and register your power of attorney yourself. It does have to be completed and signed in a certain order. By working with a Solicitor they will be able to ensure that this is done correctly. 

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