A power of attorney is a legal document giving a person (the attorney) the ability to make decisions on the donor’s behalf.
To give someone the ability to make financial or medical decisions on your behalf, you need to give them power of attorney status while you can still make decisions for yourself. This is known as having mental capacity.
Having a power of attorney in place can provide peace of mind, knowing that if anything happens to you and your mental capacity someone you trust will oversee your affairs.
To make things confusing, there are a few different types of powers of attorney. So, what is the difference between an enduring power of attorney, lasting power of attorney, and ordinary power of attorney?
This article will investigate the different types, what they are for and when you might need one.
Lasting Power of Attorney (LPA)
LPA is the most common type; with no expiry date, it allows another person to make decisions on your behalf in an ongoing agreement. It can be used as soon as the document is registered with your permission, or it can commence as soon as you lose mental capacity. An LSA must be registered through the Office of the Public Guardian.
There are two types of lasting power of attorney, property and financial or health and welfare. You can set up both at the same time, or only have one. You can also have different attorneys for each or the same attorney.
Property and financial LPAs have the power to make decisions about your money, including managing your bank accounts, paying bills, pension, benefits, and buying and selling property.
Health and welfare LPAs have power in decisions about your medical care, where you live, what you eat, who you have contact with, and your social activities. Health and welfare can only be used once the donor loses capacity, but it must have already been agreed when they had mental capacity.
Enduring Power of Attorney (EPA)
Enduring powers of attorney ceased in October 2007 but any that were set up before then are still valid. Lasting power of attorneys were introduced in 2005 to replace EPAs.
Ordinary Power of Attorney
An ordinary power of attorney can only act on your behalf for a limited amount of time for your financial affairs while you still have mental capacity.
This option would be most helpful if you need someone to make decisions for you temporarily, such as while you’re recovering in hospital or overseas or on holiday for a while. It doesn’t need to be registered with the Office of the Public Garden.
You’re able to limit the powers that your attorney has so you can decide what they can access and what they can’t.
The ordinary power of attorney will expire as soon as you lose mental capacity. This means you need to set up an LPA if you want someone to make decisions for you once you lose mental capacity.
Differences between Ordinary and Lasting Power of Attorney
If you’re not quite sure which type you need, below explains the main differences between the two.
Lasting Power of Attorney:
– Must be registered with the Office of Public Guardian
– Effective immediately or when the donor loses capacity
– Lasts until you die or revoke authority
– You can choose either or both property and financial affairs, health, and welfare
Ordinary Power of Attorney:
– Does not need to be registered with the Office of Public Guardian
– Effective immediately or from a date you chose
– Lasts until the expiry date, until you lose mental capacity or revoke authority
– You can specify which decisions your attorney can make or give them full authority
What is mental capacity?
You have mental capacity when you’re able to understand the decision you need to make, why, and what the outcome of your decision may be.
People’s mental capacity can change from day to day depending on what is required. For example, they may be able to decide what to buy in the supermarket but unable to arrange their car insurance.
If you believe your mental capacity may deteriorate or you are becoming unwell, setting up an LPA is important so you can decide who will handle your affairs when the time comes.