Lasting power of attorney: the two types, what they cover, and why waiting is the main risk

A lasting power of attorney is a legal document that gives someone you trust the authority to make decisions on your behalf. It is one of the most protective documents you can put in place for yourself and your family.

The Office of the Public Guardian registers LPAs in England and Wales. Scotland has a similar document called a continuing power of attorney, and Northern Ireland uses an enduring power of attorney.

The two types of LPA

The property and financial affairs LPA authorises your attorney to manage your bank accounts, pay bills, deal with your property, collect your pension, and make financial decisions generally. With your permission, this LPA can be used while you still have capacity.

The health and welfare LPA authorises your attorney to make decisions about your medical treatment, care arrangements, and daily welfare. This one only comes into effect when you lack capacity to make those decisions yourself.

The registration process

An LPA is not valid until it has been registered with the Office of the Public Guardian. Registration currently takes around ten weeks. There is a registration fee of £92 per LPA, reduced for those on low incomes.

Before registration, the LPA must be signed by you (as the donor), your attorneys, and an independent witness called a certificate provider, who confirms you understand what you are signing and are not being pressured.

The capacity window

The most important thing to understand about LPAs is that you must have mental capacity when you sign the document. Once you lose capacity, it is too late to make an LPA.

Capacity is not all-or-nothing. Someone in the early stages of dementia may still have sufficient capacity to make an LPA. By the time a parent shows obvious signs of cognitive decline, it may already be too late to act.

The alternative: the Court of Protection

If someone loses capacity without having made an LPA, their family has no automatic right to manage their affairs. The only route is to apply to the Court of Protection to be appointed as a deputy.

• Deputyship applications typically take six months or more to complete
• The court fees and legal costs can run to several thousand pounds
• A deputy must file annual reports and accounts with the OPG
• The court may impose restrictions on what a deputy can do
• Financial decisions are monitored throughout, which can feel intrusive

Choosing your attorneys

Your attorney should be someone you trust absolutely with your money and your wellbeing. Most people choose a spouse, adult child, or close friend. You can appoint more than one attorney and specify whether they must act together or can act independently.

Simply Estate is an estate planning firm. Our own team can help you put both types of LPA in place. Visit our lasting power of attorney page to get started.