None of us probably likes the idea of a court deciding who should look after our finances if we’re incapable of doing so. But the fact is that unless you’ve drawn up a lasting power of attorney, which is a legal document saying who should look after your finances, that’s exactly what could happen. Find out what’s involved.
Understanding lasting power of attorney
The best way to protect yourself is to draw up a an ongoing power of attorney. In England and Wales it’s called a lasting power of attorney (LPA), in Scotland it’s called a continuing power of attorney and in Northern Ireland it’s called an enduring power of attorney.
SAVVY TIP: The system of powers of attorney was overhauled in England and Wales in 2007. Before 2007 ongoing powers of attorney were called enduring powers of attorney. If you have an enduring power of attorney drawn up before 1st October 2007, it is still valid. However, you can also choose to replace it with a lasting power of attorney if you prefer.
There are two types of lasting power of attorney in England and Wales:
- A property or financial affairs LPA: which deals with decisions about your home and finances (such as money in the bank, investments etc).
- A health and welfare LPA: which deals with where you live as well as medical and day-to-day care.
SAVVY TIP: Welfare lasting powers of attorney are not the same as living wills. A living will is not a legally binding document and it also only addresses what you would like to happen at the end of your life, rather than wider issues relating to your treatment and healthcare.
Ongoing powers of attorney in Scotland
In Scotland, the system of powers of attorney is slightly different. There are two different types of power of attorney you can draw up:
- Continuing power of attorney: you can choose someone to make decisions about your finances and property. The power of attorney can take effect immediately or at a later date.
- Welfare power of attorney: this document lets you appoint someone to make decisions about your health or welfare
SAVVY TIP: If you’ve drawn up a power of attorney to be used in the event of you becoming mentally incapacitated, it has to be registered before it is valid. There’s more information about powers of attorney at the Office of the Public Guardian (Scotland).
When should I draw up a power of attorney?
There’s no getting away from the fact that thinking about what happens to you should you lose the ability to make decisions about yourself and/or your finances. But I’ve lost track of the number of people who’ve contacted me because their parent has been diagnosed with dementia and there’s no power of attorney in place.
SAVVY TIP: Sorting out a power of attorney won’t jinx you or make it more likely that something horrible happens to you. I know that may sound silly but it’s one of the reasons why it’s easier to put off drawing up something like a power of attorney.
You must draw up the power of attorney while you’re able to understand what you’re agreeing to.
SAVVY TIP: If you need to move quickly to sort out someone’s affairs and you think that drawing up an ongoing power of attorney will take too long, you can use an ordinary power of attorney instead. However, unlike an ongoing power of attorney, an ordinary power of attorney will only last for up to a year and can’t be used once someone is mentally incapable of looking after their own affairs.
Do I need a solicitor to draw up a power of attorney?
You don’t need to use a solicitor to draw up an ongoing power of attorney. You may be able do this for yourself online. If you’re drawing up a lasting power of attorney in England or Wales, you can use the government’s lasting power of attorney online service.
SAVVY TIP: It’s free to use but you have to register first.
However, if you want to use a solicitor, you should make sure they regularly deal with powers of attorney as it’s a very specific area of law.
Contact a solicitor who’s a member of Solicitors for the Elderly, as they specialise in this area of law.
Age UK has information about lasting powers of attorney in England and Wales.
The Alzheimer’s Society has a factsheet about lasting and enduring powers of attorney.
The Office of the Public Guardian in Scotland has information a guide to making a power of attorney.
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