What is a Lasting Power of Attorney?

Your handy guide to your Lasting Powers of Attorney

Nobody likes to think about a time when we may not be able to make important decisions for or about ourselves any longer. However, putting protections in place for that now can bring enormous peace of mind for you and your loved ones.

Should an accident happen, or you lose your mental capacity through illness, a Lasting Power of Attorney will ensure those you choose can legally speak for you.

To help you understand why a Lasting Power of Attorney is so valuable, we’ll be discussing the following:

• What is a Lasting Power of Attorney?
• Why is it important to have a Lasting Power of Attorney?
• Health and Welfare Lasting Power of Attorney.
• Property and Financial Affairs Lasting Power of Attorney.
• How many attorneys can I choose?
• Do my Enduring Power of Attorneys still work?
• How much is it to arrange my Lasting Powers of Attorney?

What is a Lasting Power of Attorney?

A Lasting Power of Attorney (LPA) is a legal document that allows you to nominate the people you trust most to make important decisions for you – and about you – if the need arises.

There are two different types of LPA:

• Health and Welfare Lasting Power of Attorney
• Property and Financial Affairs Lasting Power of Attorney

Both of these LPAs must be arranged when you have the mental capacity to do so. It is unfortunately too late if you try to arrange one at the point of need. 

You can arrange your LPAs yourself using the gov.uk website, ask someone to help you, or instruct a solicitor to arrange them for you.

The attorneys must always:

• Act in your best interests
• Follow any instructions you put in your LPA
• Consider any preferences you put in your LPA

Arranging your LPA now, while you are able to, is the best way to protect yourself and your finances in the future. Without one, your family could be left feeling powerless at an already difficult time. 

Why is it important to have a Lasting Power Attorney?

Every adult should consider having an LPA in place, regardless of relationship status, financial position or how healthy you may be. 

It is an unfortunate fact of life that as we get older, we are more likely to suffer from ill-health or a lack of mental capacity. 

According to the NHS, 1 in 14 people over the age of 65 have dementia, and the condition affects 1 in 6 people over 80. Of course, it’s not just Alzheimer’s and dementia that can affect mental capacity. A stroke or a serious accident, for example, can make a person dependent on others to make decisions for and about them.

If something happens that means you need your loved ones to make decisions for you, an LPA will ensure that your spouse, partner, children or even a close friend can help. 

Be careful not to assume your next of kin can simply make these decisions for you: it could be an expensive mistake to make. If you need a relative to act on your behalf and no longer have the mental capacity to arrange an LPA, your family would have to apply to the courts for permission. This can be a very costly and time consuming process.

Health and Welfare Lasting Power of Attorney

A Health and Welfare LPA allows the person/s you choose (your ‘attorneys’) to make decisions about your care, but only if you lose the mental capacity to do so yourself. 

It is usually recommended that you appoint two or more attorneys for your Health and Welfare LPA. The decisions they may need to make could include: 

• Where you live or are treated
• Day-to-day care including your diet
• Who can and cannot be in contact with you
• What social activities you can take part in
• Whether to accept or refuse life-sustaining treatment

It is an unfortunate but common misconception that your next of kin will have the power to make these decisions on your behalf, should a time come when you are unable to. 

Appointing your nearest and dearest now as attorneys in your Lasting Power of Attorney will ensure they have that authority. It may save a lot of potential heartache and frustration in the future.

Property and Financial Affairs Lasting Power of Attorney

A Property and Financial Affairs LPA allows those chosen by you to look after your finances at any time of your life. 

You might choose not to handle your finances any longer, or want a safeguard should you become unable to handle your finances or make important financial decisions, including: 

• Paying bills or your care fees
• Withdrawing money from your bank account
• Accessing your income, benefits or investments
• Buying or selling property or remortgaging
• Accessing further funds from an equity release plan

Read more about why an LPA is important if you have an equity release plan here.

You may think that your spouse can legally do all these things on your behalf but sadly that is not the case. They could access your joint bank accounts that have their name on, but not your personal bank account, for instance.

How many attorneys can I choose?

You can choose as many attorneys as you wish, though one or two attorneys is standard. If you decide to choose more than one attorney, you will need to stipulate in your LPAs how you want your attorneys to be able to make decisions.

The options you can choose from are:

• Jointly and severally – the attorneys can make decisions on their own or together
• Jointly – the attorneys must all agree on every decision
• Jointly for some decisions, jointly and severally for others – your attorneys must all agree on certain decisions, but other decisions can be made by one or some of them

Remember, if you create both types of Lasting Power of Attorney, you do not have to appoint the same people as attorneys. For instance, you might choose your spouse and one of your children for your property and financial decisions, then your spouse and another of your children for your health and welfare decisions. 

Do my Enduring Powers of Attorneys still work?

Enduring Powers of Attorney (EPAs) cover decisions about your property and financial decisions only. They do not cover your health, welfare or care decisions. 

EPAs were replaced by LPAs in October 2007. However, as long as you signed your EPA before 1st October 2007, it should still be valid. 

If you want both types of LPA in place then you may wish to dispose of your EPAs and arrange the newer, more comprehensive LPAs.

How much does it cost to arrange my Lasting Powers of Attorney?

Prices vary depending on who you arrange your Lasting Powers of Attorney through. Typically however, you can expect to pay around £99 per LPA, or sometimes less if arranging both LPAs together. Solicitors tend to be the most expensive option as they charge legal fees too.

When you arrange your LPAs, there is a compulsory cost to register each type of LPA with the Office of the Public Guardian. If you live in England and Wales this is £82 (£164 for both). In Scotland the charge is £83 per LPA and it is £151 in Northern Ireland. 

If your income before tax is less than £12,000 a year, you only have to pay half the fee. If you receive certain means-tested benefits such as the Guarantee Credit element of State Pension Credit or Income Support then you may be exempt from paying the fee at all.

You can arrange your LPAs yourself on the gov.uk website to save money. However, you should remember your LPAs are a very important legal document so you’ll need to be confident that you understand everything very clearly. 

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn