None of us like to think of a situation where we may struggle to make essential decisions for ourselves. However, this may be an instance that could happen to any of us at any time.
To ensure your life’s decisions are made as per your wishes, giving someone you trust Power of Attorney (POA) to make key decisions on your behalf is an option worth considering.
Power of Attorney is a powerful legal tool that can help you stay in control of your life, regardless of what the future holds. Whether you create your Lasting Power of Attorney online or offline, having it in place before you reach a certain age serves as a safety net for both you and your family.
In this article, we will explore the different types of Power of Attorney, how they work and how they can help you protect yourself during challenging times.
Let’s begin!
What Does It Mean To Give Someone Power of Attorney?
If you are aged 18 or older and have the mental ability to make property, financial and medical decisions yourself, you can arrange for someone to make these decisions for you when you are no longer able to yourself. This is called giving someone Power of Attorney.
The person who is given power of attorney is called the “attorney” and you are known as the “donor”. As the donor, you have the power to appoint just one or more than one attorney to act on your behalf.
POA gives peace of mind that someone you trust is in charge of your health and financial affairs. The person given Power of Attorney is required to follow certain rules and guidelines upon taking this responsibility.
Types of Power of Attorney
As you can see, Power of Attorney is a very useful tool that can help you plan for the future. Let’s take a look at the three main types of Power of Attorney and how they work:
1) Lasting Power of Attorney (LPA)
A Lasting Power of Attorney (LPA) allows you to give someone you trust the legal authority to make important and informed decisions regarding your healthcare or financial affairs.
There are two types of LPA:
Health and Welfare LPA
A health and welfare LPA provides your attorney with the power to make key decisions regarding your medical care, daily routine, moving into a care home and life-sustaining medical treatment. This LPA can only be activated if you are unable to make your own decisions.
Property and Financial Affairs LPA
A property and financial affairs LPA gives your chosen attorney the power to make important decisions about your money and property. This includes managing your bank accounts, paying bills and even selling your home.
Once registered with the Office of the Public Guardian, this LPA can be used immediately or held in readiness until needed.
2) Enduring Power of Attorney (EPA)
An Enduring Power of Attorney is an obsolete tool that served as a predecessor to the LPA. Currently, no EPAs are being created, however, if you have one that was set up before 2007, it’s still valid.
An EPA only covers your financial affairs. As such, it is recommended to replace it with an LPA to cover both health and welfare. If you do retain your EPA, your attorney would need to register it with the Office of the Public Guardian (OPG) before it can be used in the event of mental incapacitation.
3) Ordinary Power of Attorney (OPA)
An Ordinary Power of Attorney is different from an LPA or EPA as it is typically activated for a limited time in cases apart from loss of mental capacity. This is why it’s only relevant for financial affairs.
A common reason you would require an OPA is if you are unavailable for decision-making over a substantial time period. For instance, you could be going into the hospital for an extended stay or could be out of the country and difficult to contact.
Similar to LPAs, you will need to use clear and specific language to set up an OPA or the document will be considered invalid. As with an LPA, ensure that your attorney fulfils the requirements and is willing to undertake the role.
What Happens if There’s No Power of Attorney?
If you were to lose the mental capacity to make your own decisions, whether through illness or accident, then it may be possible for a third party to apply for a Court of Protection Deputyship.
In these circumstances, they will have to contact the Court of Protection who will then review your case before making a decision.
There can be serious repercussions to not having Power of Attorney in place when a serious illness strikes as you can only register it while you still possess mental capacity.
To Wrap Up
Life is uncertain and there might come a time when you are unable to make or communicate your own decisions.
If this time comes, having a Power of Attorney set up can make things much easier – so, it’s worth considering setting up one for yourself as soon as you can.
Now that you are well-informed on the different types of POA and how they work, you can choose the right one that matches your exact needs. Whether you are setting up an LPA or an OPA, remember to follow all the requirements to ensure that your document is legally binding.
