What is a lasting power of attorney?

A lasting power of attorney (“LPA”) is a legal document that allows the attorney to make decisions on behalf of the donor. LPAs are governed by the Mental Capacity Act 2005.

There are two types of LPAs:

• health and welfare, and;
• property and financial affairs.

Making an LPA includes a number of requirements and formalities. For instance, signing an LPA requires a specific order and format. Moreover, you must register an LPA with a government body in England and Wales called the Office of the Public Guardian (“OPG”).

An LPA is designed to provide long-term protection for the donor in the event that they become mentally incapacitated. This means that an LPA remains valid even if the donor is no longer able to make decisions on their own. A donor can only create an LPA when they have mental capacity, and they must register it with the OPG before it comes into effect.

If you’re unsure about which LPA you might need, consult our expert team by calling 0203 007 5500.

Health and welfare lasting powers of attorney.

The health and welfare LPA gives the attorney authority to make healthcare decisions on behalf of the donor. This includes end of life decisions such as the refusal of treatment or non-resuscitation.

This LPA is only able to take effect upon the donor losing mental capacity. Due to this, even after registration with OPG, an attorney may not step in to assist with making decisions for the donor if the donor still has mental capacity to make their own decisions.

Property and welfare powers of attorney.

The property and financial affairs LPA focuses on all matters relating to property and finances. The attorney is given the authority to manage the donor’s bank accounts, their property and any investments the donor may have. The attorneys can also make investments on the donor’s behalf and even sell the donor’s property (but only if that is in the donor’s best interests).

The donor can choose when this type of LPA takes effect. This is either upon registration with the OPG, or only when the donor loses mental capacity. This is a personal preference for each donor but there are many arguments as to why the donor may require help before they lose mental capacity entirely.

What are the differences between general powers of attorney and lasting powers of attorney?

There are a number of notable differences between general powers of attorney and LPAs. This means that one may be more appropriate for a specific situation than the other. Such differences include:

1. The duration of the document

One of the most important differences between a general power of attorney and an LPA is the duration of the document. A general power of attorney is valid for up to 12 months, subject to the donor retaining mental capacity within that time and can be revoked at any time by the donor.

Conversely, an LPA remains valid even if the donor becomes mentally incapacitated. A donor can cancel an LPA as long as they have mental capacity. To cancel the LPA registration, the donor must sign a deed of revocation which they then must submit to the OPG.

2. When the documents become legally effective

A general power of attorney becomes legally effective upon valid signing and witnessing. By contrast, the donor must register an LPA with the OPG before it becomes legally effective.

Due to the volume of LPAs that the OPG receive daily (between 3,000 and 4,000 by their last estimate), they take several weeks to register. The registration includes several stages, including the initial review, the more detailed checking of the document and an additional 4 week cooling off period in which any of the donor or their attorneys may object to the registration of the LPA. This is important to protect the donor’s interests and help to safeguard against abuse of power by the attorneys.

3. Formalities in making the document

The donor must sign the general power of attorney as a deed, which means they need two witnesses to their signature. LPAs must also be signed in the prescribed order, each signature must be witnessed, and the donor must provide a certificate provider.

A certificate provider is a person who can verify that the donor does have mental capacity. This means that the donor understands what an LPA does and are not under the influence of anyone else when signing it.

4. Scope of authority granted in the document

A general power of attorney is generally only used in relation to property and financial matters. It can either cover all such matters or be more limited in scope, such as the management of one of the donor’s bank accounts for example.

LPAs are usually much broader in scope and can encompass decisions about property and financial matters and also health and welfare decisions.

5. The flexibility of the documents

As alluded to above, general powers of attorney are very flexible and can be used to cover any breadth of situation with which the donor may require assistance, from the management of one bank account or the sale of one property, to the delegation of all financial matters for a short period of time.

By contrast, LPAs are far more rigid and generally cover all property and financial or health and welfare matters. The only way in which an LPA can incorporate bespoke wishes of the donor is through the use of instructions and preferences. Instructions must be legally enforceable and will be reviewed by the OPG legal team upon registration. Preferences do not need to be legally enforceable.