What is a Power of Attorney and which is right for me.
A Power of Attorney is a legal document where someone gives the right to other(s) to make decisions on
their behalf should they lose “mental capacity”.
Mental capacity refers to a person’s ability to be able to make their own decisions. It may sound like something you would never lose but, in reality, someone is regarded as lacking capacity if they cannot do just one of the following:
- Understand information relevant for making a specific decision.
- Weigh up the arguments and make an informed decision.
- Retain knowledge and thoughts about information relevant to making a specific decision.
- Communicate their decision.
There are many ways in which someone can lose mental capacity (brain injury, mental disability, dementia, alcohol, etc.) and these can strike even the best of us at any unanticipated time.
The person handing over the Power Of Attorney is called a “donor”. It’s VERY important to note that “the donor” CANNOT set up a Power of Attorney when they have lost mental capacity. It must be set up whilst they have capacity, so its best to be prepared earlier on.
The person who is given power of attorney is known as the “attorney” and must be over 18 years old.
There are two types of Power of Attorney in the UK: Lasting Power of Attorney (LPA) and an Ordinary Power of Attorney.
Lasting Power of Attorney (LPA).
This is a continuous agreement and is the most common type in the UK. An LPA legally gives the rights to other(s) to make decisions on the donor’s behalf. There are two types of LPA:
- Property And Financial Affairs LPA. The attorney will be able to handle and make decisions about your money, property and assets. This will include things like paying bills, and selling your home. Once set up, it can be used immediately.
- Health and Welfare LPA. The attorney will have the power to make decisions in regards to your everyday life. This will mean handling medicine, helping with daily routine such as washing and could even mean making the decision to move you into a care home. Once set up it can only be used when the donor loses mental capacity.
Lasting Power of Attorney replaced Enduring Power of Attorney in October 2007.
Ordinary Power of Attorney (OPA)
An Ordinary Power of Attorney which is sometimes known as a General Power of Attorney is similar to an LPA, however only covers a temporary period of time (usually only 12 months) and becomes invalid as soon as you lose mental capacity. Below we contrast and compare LPAs and OPAs so you can decide which is the best for you.
Ordinary Power of Attorney “vs” Lasting Power Of Attorney
An Ordinary Power Of Attorney (OPA) becomes invalid when you lose mental capacity and is temporary so an example of when you may prefer an OPA is when you are on an overseas trip for an extended period of time, or have sustained an injury.
Lasting Power of Attorney (LPAs) are suitable to prepare for the long-term when we all bear the risk of losing mental capacity (remember, a property and financial affairs LPA can be used immediately) and will last until you die or revoke authority.
In England and Wales an LPA must be registered through the “Office of Public Guardian”. An OPA does not need to be registered. With an OPA you have more say on exactly which decisions your attorney can make and the time period they have power for.
For more information get in touch with us at Just Wills and Legal Services on 01342 477102 to book a free consultation.
This article is for general information only and does not constitute legal advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.
This article has been provided by Just Wills & Legal Services Ltd one of the leading home visit Wills, Estate Planning and Probate services in the country.
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