The different types of power of attorney

In Wills and Probate

What does power of attorney mean? Put simply, power of attorney is a legal document that starts the process of handing over the responsibility of your affairs to a loved one or relative when you, the donor, become unable to tend to them yourself.

If you are worried about losing the ability to make your own decisions, following an accident or diagnosis of an illness such as an Alzheimer's for example, then you can appoint an individual to hold your power of attorney and make important decisions on your behalf.

Generally speaking, power of attorney is used for two concerns:

  1. Power of attorney for financial issues (financial power of attorney).
  2. Power of attorney for health and welfare issues (medical power of attorney).

The person given power of attorney must adhere to a number of rigid rules as part of taking on this responsibility - such as keeping a thorough record of accounts or adhering to the limitations you make on their decision making powers.

What is Financial Power of Attorney?

Financial Power of attorney usually involves handing over the basic control of personal finance, such as managing the various bank or building society accounts. If you have been granted this type of power of attorney then you may also be expected to collect any income such as a pension or benefits on behalf of the donor. Usually, this will also involve day-to-day activities such as paying bills, but it can also involve more complex procedures such as selling a property.

What is Medical Power of attorney?

As a protective safeguard, medical power of attorney for health issues can only be used once the donor is deemed to have lost the mental capacity to make their own decisions. Typically, this means that the appointee will be able to choose where the donor should live, how they should be cared for and what kind of social activities they attend. It may also be necessary to make decisions regarding medical care if hospitalisation is required for any reason.

What is limited (ordinary) power of attorney?

It is also possible to set up an ordinary power of attorney, which only lasts for a limited amount of time. Since ordinary power of attorney is automatically voided if the donor is no longer able to make decisions, it is best utilised for periods such as holidays or if the donor is unable to leave the house but is still mentally sound. Ordinary power of attorney can be reversed at any time and can even be applied for specific tasks.

How to set up Lasting power of attorney

Granting somebody power of attorney over either your financial concerns or health and welfare is a simple process. A solicitor can register the power of attorney with the Office of the Public Guardian (OPG). However, proof is required that the individual handing over power of attorney has the mental capacity to do so, and is not being coerced in any way.

What happens if there's no power of attorney?

If a person loses the mental capacity to make their own decisions, either through illness or accident, then it is possible for a third party to apply to become their deputy from that point on. They will have to contact the Court of Protection, which will then review the case and make a decision. This can be conducted through the post and not necessarily at a hearing.

If you believe you may need help organising power of attorney start comparing solicitors now.