There can, unfortunately, come a stage in life when you are no longer able to make decisions. This can be a very big step and something that isn’t to be taken lightly. When this time comes, you will need to assign someone as your power of attorney and they will be the person who you give the right to make these decisions on behalf of yourself. With this, they can decide on things such as decisions that impact your medical choices or financial aspects. You are only able to set up and assign someone as your power of attorney when you have mental capacity, so if you are ageing or have been diagnosed with an illness it could be a good idea to set it up sooner rather than later. This way you know you have the person you entrust most being in charge of your affairs and making the choices they know to be in your best interest.
Under the term Power of Attorney, there are two main types. This is a Power of Attorney and a Lasting Power of Attorney. Below we look into the difference between the two and what they mean.
What is Mental Capacity?
Having mental capacity means you are in your mind and able to make specific decisions when they need to be made. You must be fully aware of the decision you are making, what the outcome would be and why this might be. There are many factors that could determine if someone has mental capacity or not, as they might be fine at making small decisions such as what to eat for lunch, but unable to comprehend or execute larger life choices. Mental capacity tends to be determined by two factors: whether the person in question is unable to make a decision when it’s needed and whether they have a brain impairment due to substance abuse, head trauma or illness.
What is a Power of Attorney?
When it comes to choosing a Power of Attorney, it means you are entrusting someone to be in charge of your affairs. An ordinary power of attorney – also known as a general power of attorney can only be used if the person electing someone to be their OPA has mental capacity. They would look for a power of attorney to look after their affairs or make decisions for reasons such as whether they are going travelling out of the country or if they are in hospital (or unable to do things) due to an illness or an accident. The person who is made the Power of Attorney must be over 18, not be undischarged or bankrupt.
When you make an OPA you don’t need to register them, you simply need to put it in writing. You can use wording such as:[Text Wrapping Break][Text Wrapping Break]“This General Power of Attorney is made this day of (enter date here) by me (enter full name) of (enter address). I appoint (attorney’s full name) of (address) (joint) / (jointly / jointly and severally) to be my attorney(s) in accordance with section 10 of the Powers of Attorney Act 1971. [Text Wrapping Break]“Signed by me as a deed and delivered.”
When it comes to ending the powers of an Ordinary Power of Attorney, it can either be terminated in one of two ways. This is if the OPA revokes it with a deed of revocation which is essentially a document to state that the power of attorney agreement is null going forward, or if the person in question no longer has the mental capacity to make decisions for themselves. This could happen for instance if their illness worsens and they can no longer understand the decisions they are needing to make. When this occurs, you can then look to a Lasting Power of Attorney as outlined below.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney is a legal document that puts someone in charge of your decisions should you no longer have the mental capacity or should you develop an illness such as dementia or a brain injury that impairs your own ability to make decisions. This tends to be a type of attorney that people choose in order to cover themselves for the future and comes into effect once you no longer have capacity. This means it could have been set up beforehand, but only once this happens does it come into effect.
There are two main types of Lasting Power of Attorney and these are to cover the health and wellbeing of a person, and to cover the property and financial affairs of someone, both in a business and personal sense. Under this it can cover:
- The purchasing and selling of property and the decisions involved within this
- The operating of the person’s bank account
- Sorting out tax affairs for the person
- Claiming any benefits on behalf of the person in question
Putting a Lasting Power of Attorney in place is a bit more complex than an Ordinary Power of Attorney and requires you to register this legally. You need to pay £82 to register someone as an LPA in the UK and it’s recommended you get a solicitor to ensure the process is done as efficiently as possible. You will need to submit your LPA forms to the Office of the Public Guardian and provided there aren’t any mistakes in your forms, the process can take about eight to ten weeks to complete.
This should explain a bit more clearly the difference between a Power of Attorney and a Lasting Power of Attorney. By fully understanding the two you should be able to fully comprehend what it is should you be asked to be one, or should you need to assist a relative. If you are looking for more advice or assistance regarding what is a Power of Attorney or a Lasting Power of Attorney, please get in touch with us today, we would love to help. You can also find more information on our website.