Different types of power of attorney
There are different types of power of attorney and you can set up more than one. They cover two main areas, health and wealth and property and finance. You can choose whether you wish to have one of both areas.
Ordinary power of attorney
This covers decisions about your financial affairs and is valid while you have mental capacity. It is suitable if you need cover for a temporary period (hospital stay or holiday) or if you find it hard to get out, or you want someone to act for you.
Lasting power of attorney (LPA)
An LPA covers decisions about your financial affairs, or your health and care. It comes into effect if you lose mental capacity, or if you no longer want to make decisions for yourself. You would set up an LPA if you want to make sure you’re covered in the future.
Registering an OPA or LPA
Unlike some powers of attorney, an OPA does not need to be registered with the Office of the Public Guardian, and can be used as soon as the donor signs it. With a LPA you need to register this and send it to the Office of Public guardian. There will be an additional charge via them of £82 per application.
There may be a possibility that a time in your life doesn’t allow you to manage your finances or personal welfare and you need someone like a member of your family or partner or close friend to make those all important decisions for you.
A lasting power of attorney (LPA) is where you are giving these rights to someone so that they can legally make these decisions for you.
If you become what’s known as incapacitated due to an illness or injury that we cannot control, the bank can and will FREEZE your assets including your bank account/s. This means that your normal day to day bills won’t get paid inc. the mortgage. You can imagine this will cause huge upheaval. Giving someone the control so that these things still continue to get paid or you have access to certain health areas is very important. Organising a LPA in advance will give you peace of mind knowing that your life can continue if you can’t look after yourself.
You can choose a friend, a partner or a member of your family or even a professional such as a solicitor to do this and to become your attorney.
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A good example
is this. Man (A) lives with his partner (B). They have their own and maybe joint bank accounts paying the rent/mortgage and all the bills, maybe school costs, car costs, etc
Suddenly, the one person suffers dementia, a car accident or a mental health issue and it renders that person incapacitated and they cannot look after themselves or manage their finances.
The bank account is straight away frozen, the partner (B) cannot access the joint account even though their name is on the account. This account won’t pay ALL the bills, the rent or mortgage and maybe the school fees. What is the partner (B) to do? Well without a LPA, run the risk of ruin or apply for a deputyship. This is an expensive and long winded process with the courts which anyone would want to avoid.
