All of us know that we need to write a Will to make sure that our loved ones are financially secure in the event of our death. But what happens if you get ill and you can't look after yourself or you become mentally incapable? Would your affairs be left in limbo if you had an accident or got sick?
A power of attorney can help. It allows you to nominate a trusted friend or relative, or more than one if you so wish, to act on your behalf. The person you appoint, called an 'Attorney', can then use your money to pay bills, sell assets on your behalf and make gifts.
But what types of power of attorney are available and how do you create one? Here's our guide to what you need to know.
Q What kinds of powers of attorney are there?
A There are three types of power of attorney in England and Wales. These are as follows:
- A Lasting Power of Attorney Property and Affairs (LPA PA)
This legal document allows you to choose someone to make decisions about how your property and affairs are managed, and how to spend your money. It has no legal standing until it is registered with the Office of the Public Guardian. - A Lasting Power of Attorney Personal Welfare (LPA PA)
This allows you to choose someone to make decisions about your welfare and healthcare. It allows someone to refuse or consent to treatment on your behalf, and to decide where you live. These decisions can only be taken on your behalf when the Lasting Power of Attorney has been registered with the Office of the Public Guardian and you lack the capacity to make the decisions yourself. - A General Power of Attorney (GPA)
This document is used when you want someone to act on your behalf for only a set period of time (e.g. if you are going abroad) or for specific events. It applies only to your property and affairs and it cannot be used to authorise someone to make decisions concerning your personal welfare. Unlike the Lasting Power of Attorney, it ceases to take effect if you become mentally incapable and it does not need to be registered.
- A Continuing Power of Attorney (CPA)
This allows you to appoint someone to look after your financial affairs and property should you become incapable of doing so in the future. It remains valid after you have become mentally incapable, and it must be registered with the Office of the Public Guardian. - A Welfare Power of Attorney (WPA)
This allows you to appoint someone to make decisions about your health and welfare in the event of mental incapacity. Before it can be used, it needs to be registered with the Office of the Public Guardian and it can only be used once you have become incapable. - A General Power of Attorney (GPA)
This document is the same as the English version, mentioned above.
Q How many people should I appoint and who?
A If you did happen to become mentally incapable, you obviously would not be able to check up on the person you appointed, so it may be wise to appoint more than one person to help prevent abuse of the responsibility. Make sure that you choose people you will act in your best interests. It also may be to your advantage to choose someone who looks after their own financial affairs carefully and who you can trust to use your money wisely.
Q How do I register a Lasting Power of Attorney?
A You, or your 'attorney', can register the Lasting Power of Attorney with the Office of the Public Guardian at any time after you have made it. When you make a Lasting Power of Attorney, you must choose who you want to be notified when an application is made for it to be registered. The people you select will be called 'named persons' and before the registration is made, they must be notified by the person who wants to register it. They can then object to the Lasting Power of Attorney being registered. Once the Lasting Power of Attorney is registered it continues indefinitely, and it can be registered by the attorney after you have lost capacity.
In Scotland, a Continuing Power of Attorney can be used immediately after it has been signed by you and registered with the Office of the Public Guardian. A Welfare Power of Attorney can be used only after you are incapable of acting for yourself and after it has been registered.
Q How do I cancel a power of attorney?
A You can cancel a Lasting Power of Attorney if you still are mentally capable, but you need to get a solicitor to draft a Deed of Revocation for you. It will be automatically cancelled if the attorney dies or your spouse is your attorney and you get divorced. A Lasting Power of Attorney Property and Affairs is also revoked if you or your attorney becomes bankrupt, but bankruptcy does not terminate a Lasting Power of Attorney Personal Welfare.
In Scotland, a Continuing Power of Attorney or Welfare Power of Attorney can be revoked at any time after they have been registered, as long as you are still mentally capable. You will need to get a solicitor to draft a Deed of Revocation. Both these powers of attorney will also be cancelled if you have appointed your spouse as your attorney and you get divorced.
A General Power of Attorney is automatically annulled if you become mentally incapable. Otherwise, it remains valid until it is revoked. The power can be revoked orally, but it is best to write 'cancelled' on the original form or simply tear it up. It would also be revoked by the death or bankruptcy of you or the attorney.
Further information
Read our FAQs on Powers of Attorney
March 2008
