There are four legal instruments that might be said to fall into this category (“Types of Power of Attorney UK”).
In the context of estate planning, these are:
- General Power of Attorney. A short document requiring no special registration.
- Health and Welfare Lasting Power of Attorney. A document issued by the Office of the Public Guardian, permitting attorneys to make decisions around health and care.
- Property and Finance Lasting Power of Attorney. Also issued by the Office of the Public Guardian and dealing with financial matters.
- Enduring Power of Attorney. A forerunner of the Lasting Power of Attorney.
Before going on I’d like to share a couple of important definitions. A ‘Donor’ is the person making the power of attorney i.e. the one giving the power, to act on their behalf, to another. An ‘Attorney’ is the one who acts on the donor’s behalf, under powers conferred by a Power of Attorney.
Selection of the appropriate document will depend on its intended application. Where a straightforward instrument, allowing an attorney to act on a donor’s behalf for practical reasons, is required e.g. the donor is going away for a period of time and needs someone to sign documents for them on short notice, a general power of attorney may suffice. This is a quick document to prepare. Critically, however, it can ONLY be applied where the donor has mental capacity, so is of limited use for long term planning.
Types of Power of Attorney UK: Mental Capacity
Where attorneys’ powers are to persist after the donor has lost mental capacity, a Lasting Power of Attorney should be made.
The Property and Finance Lasting Power of Attorney, grants to attorneys, powers to act in financial matters for the donor. Critically (if so drafted), it may be used either BEFORE the donor has lost mental capacity or afterwards.
The Health and Welfare Power of attorney allows attorneys to make decisions around health and care and can ONLY be used when the donor has lost mental capacity. This document may deal with decisions such as ongoing life support.
The Enduring Power of Attorney confers similar powers to those laid out in the Property and Finance Lasting Power of Attorney. This document, whilst still in circulation, is no longer available de novo, with no new Enduring Powers of Attorney issued after 2007.
The process of putting a Lasting Power of Attorney in place is somewhat laborious (albeit streamlining steps have been taken), and may take 3-6 months to complete (including registration and issue of the document by the Office of the Public Guardian).
Lasting Power of Attorney application forms must be completed correctly (there were more than 20,000 documents rejected last year). A professional will charge a few hundred pounds to draft these on your behalf, we believe this money well spent.
If a donor loses mental capacity BEFORE applying for a Lasting Power of Attorney, put simply, it is too late. In this case, a ‘Deputyship’ must be applied for through the Court of Protection. This process may take more than a year (during which time assets may be frozen) and may cost several thousand pounds (ongoing fees also apply) – it is estimated that the cost of applying for a deputyship is twelve-fold greater, than that of applying for a Lasting Power of Attorney professionally.
There is no next of kin in English law. If you have someone who you trust to perform the role, do not delay in creating a Lasting Power of Attorney, far too few people have them!
If you’d like to know more, please visit our website (www.confidencewills.co.uk) and book a free consultation now.