Financial vs. Health Power of Attorney: What's the Difference?

Choosing the right Power of Attorney is an important step. But with the law offering three types of ‘POA’, what are the differences between them all?

Ordinary Power of Attorney or Lasting Power of Attorney?

There are two kinds of Power of Attorney available.

Ordinary Power of Attorney gives someone temporary permission to look after you or your money. It’s often used when you’re going abroad or a short stay in hospital.

Lasting Power of Attorney gives someone long-standing permission to look after you or your money.
Just to make it a bit more confusing, you have to choose between two types of Lasting Power of Attorney (LPA):
  • Property and Financial LPA
  • Health and Welfare LPA

Don’t worry, you can start or stop Power of Attorney any time, so you’re always in control.

You can find more help and advice about Power of Attorney in our article hub.

What is a Property and Financial LPA?

A Property and Financial LPA lets someone look after your home and money in your best interests.

It’s a common misconception that your partner or spouse can automatically manage your money when you’re unable to do so. But without Power of Attorney, they’re not legally allowed to withdraw or spend your money – and that can cause a problem if you’re out of the country or you’re no longer able to buy things for yourself.

Your financial LPA can make or help you make decisions about:
  • Day-to-day spending
  • Paying bills and taxes
  • Managing bank and building society accounts
  • Savings, pensions, and investments
  • Managing your property
  • Buying and selling property
  • Giving money to your close family, friends, and charities you’ve donated to before
  • Make a statutory will if you need but can’t make one – but they can’t change an existing will
  • Business assets – remember, it’s best to appoint a separate attorneys to manage business and personal assets

For other expenses, like interest-free loans or letting someone live rent-free in your property, attorneys must apply to the Court of Protection.

Power of Attorney keeps you in control. What finances your attorney can manage is entirely up to you.
You can permit access to some accounts, but not others; or limit the amount that can be spent; or prevent gifts and donations being made.

Your Power of Attorney solicitor will help draft an explicit document, so your intentions are clear.

What is a Health and Welfare LPA?

A Health and Welfare LPA lets someone make decisions or help you make decisions about your care and medical treatment.

Your health LPA helps you maintain:
  • Your daily routine – like washing, dressing, and feeding
  • Medical care
  • Where you live
  • Paying for essentials like food and clothing – any spending must raise your quality of life, and must be okayed by whoever looks after your money
  • Accept or refuse certain medical treatments

You can also specify treatments you don’t want in your living will (legally known as an ADRT or ‘advance decision to refuse treatment’).

Your living will and LPA should mirror each other. Update them if necessary. If there’s a conflict between what your living will says and what’s in your LPA, your attorney needs to apply to the Court of Protection for a one-off medical decision.

The Court of Protection must also step in if your attorney, your doctors, family, and friends all disagree over your treatment.

How many attorneys do I need?

You can appoint as many attorneys as you want, but to keep the peace and ensure your wishes are kept, it’s best to keep the number low.

Your chosen attorneys must be:
  • Over the age of 18
  • Capable of sound decision-making

Choose one or two people you implicitly trust to have your best interests at heart. That way, they can make difficult decisions together or step in if one attorney drops out. 

Just like separating business assets and personal assets between attorneys, it’s often wise to have one attorney caring for you and another managing your finances.

Both your Health and Welfare attorney and your Property and Financial attorney should talk to each other if there’s a conflict of responsibility. So, if your financial LPA needed to sell your home, they’d have to discuss your living arrangements with your welfare LPA, who decides where you live.

Do I need both health and financial LPAs?

Both LPAs are separate documents in the eyes of the law. So, if you want someone to look after you and your stuff, you’ll need set up both at some point.

But you don’t need both.

And you don’t need to get them at the same time.

Consider your current and future needs. It’s not always clear when you should get Power of Attorney – some require it immediately, while for others it’s an insurance policy in an uncertain world. A solicitor will be able to help identify the LPA that best fits the bill.

And finding one’s easy with our quick quote form, letting you compare Power of Attorney solicitors near you.