Lasting Power of Attorney: What is the difference between the two types?

Lasting Power of Attorney: What is the difference between the two types?

There are two types of Lasting Power of Attorney and it’s important to understand the difference between them. One is responsible for your financial affairs, and the other is for your health and welfare.

What is a Lasting Power of Attorney?

We are all used to making decisions for ourselves, but it may come to a time when you need to trust someone to make decisions for you. It could be due to ill health or other factors and you may need to appoint someone who can carry out your wishes and make decisions in your best interest.

A lasting power of attorney (LPA) is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf.

When making a Lasting Power of Attorney you must be over 18 years of age and have mental capacity (the ability to make your own decisions). For more in-depth information about all types of Powers of Attorney check out our blog: What Does it Mean and Why is it Important?

Why are there two different types of Lasting Power of Attorney

Usually, when you decide to create an LPA, you set up both the Financial and the Welfare document. It could be the case you want different people to manage the various aspects and you can select different or multiple attorneys.

The two LPAs come into effect at different times. You can select when the financial affairs attorney can come into effect, as soon as it is registered at the Office of the Public Guardian (OPG) it can be active. The welfare attorney doesn’t come into effect until you lose mental capacity and no longer have the ability to make your own decisions.

Detailed look at the two Lasting Powers of Attorney

Property and Financial Affairs

This type of Lasting Power of Attorney gives the person you assign the ability to manage your financial affairs. It will allow them to make decisions in regards to:

  • Buying, selling or renting your home
  • Paying bills
  • Opening, closing and operating bank or building society accounts
  • Insuring, maintaining and repairing your property
  • Paying for private medical care
  • Investing your savings
  • Collecting a pension on your behalf

They are also allowed to give gifts in certain circumstances such as:

  • Birthday presents and wedding gifts to family members or people closely connected
  • Donations to Charities you have supported in the past

As said previously the LPA can be effective immediately after registration. This could be advantageous to people living abroad and want someone to manage their finances. It is also useful if someone is overwhelmed by dealing with their finances and needs support.

Acting as a financial attorney comes with a responsibility and duty of care. The attorney should not directly benefit financially from the donor. An attorney should keep an accounting record and keep money, savings and property separate from their own to avoid a conflict of interest.

Health and Welfare

This type of Lasting Power of Attorney allows the person you select to manage your medical and welfare needs such as:

  • Where to live and with whom
  • Deciding about terminal illness care
  • Deciding about medical treatment
  • Your daily routine

An attorney doesn’t have the right to make decisions on:

  • Refusing any medical treatment by a responsible clinician if you have been sectioned
  • Deciding on life-sustaining treatment without checking if you have already made a decision regarding this

The Health and Welfare LPA is only active when you lose the “mental capacity” to act for yourself, the appointed attorney has no power when you can still make decisions for yourself. Mental capacity means the ability to make or communicate specific decisions. To have mental capacity, you must understand the decision you need to make, why you need to make it, and the likely outcome of your decision.

If you have a progressive illness you may want to make your own decisions about medical treatment for the future when you still have the mental capacity to do so. In this case, you may decide to make an advance decision, also known as a Living Will. You can also find out more about living wills on the NHS website

If a Living Will has been made the attorney cannot overrule this decision unless the LPA was made after the Living Will was created and it specifies they have the power to do so.

Why is having a Lasting Power of Attorney so important

It is a common misconception that giving Power of Attorney lets someone take over your life. While you still have mental capacity you can change your LPA and choose all of your welfare and financial decisions.

A Lasting Power of Attorney is essential for protecting your future wishes. If one is not in place and you lose mental capacity your partner or next of kin cannot legally make decisions for you. A Deputy application must be made to the Court of Protection and this can be very costly in terms of time, money and emotional strain for your family.

How we can help with Lasting Powers of Attorney and Living Wills

Here at Sovereign Planning we have a team of legal experts ready to assist you. If you need help writing your Last wills and testaments, setting up a Lasting Power of Attorney or creating a Living Will you can contact us today.

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