Understanding Power of Attorney

3 min read

What is a Power of Attorney?

A lasting power of attorney (LPA) is a legal document that gives someone the power to make decisions on behalf of someone else. This can be for decision-making power on health matters, for managing money and property, or both.

Who is it for?

It’s for anyone at least 18 years old who wants to prepare ahead of time for what should happen if they should lose the ability to make their own decisions. For example, if you lose mental capacity as a result of an accident or debilitating illness.

How does it work?

The person you choose to make decisions on your behalf is called an ‘attorney’ and you are the ‘donor’. As a donor, you can have more than one attorney, which means you can choose multiple people to make decisions for you when you aren’t able to.

If an attorney has decision-making power over health and welfare matters, they can make decisions about things like what kind of treatment or care you get, or whether or not to move you into a care home. But they only have this power when you’re unable to decide for yourself.

If an attorney has decision-making power over your finances and property, they can make decisions about things like selling your house and managing any bank accounts or investments you have. You can choose either to have this come into effect only when you lose capacity, or they can begin managing your finances as soon as it’s registered, but with your permission.

How can I get one?

You can either hire a solicitor to help you, or you can go through the process yourself. Once you have decided on who you want to be your attorney(s), you must fill in all the relevant forms. This will involve detailing who you want as an attorney, what they can do, and when they can do it, including any preferences you may have.

The forms have to be signed by everyone involved, so that means a signature from you (the donor) and the attorney (the person you’ve chosen to make decisions for you). You will also need signatures from some other witnesses and a certificate provider (who is there to make sure you’re doing this by choice and you understand its implications).

In order for the Power of Attorney to come into effect, you must register it with the Office of the Public Guardian online or by post (though this could take longer). Once registered, you’re all sorted.

How long does it take to set up?

If everything else goes smoothly and you’ve filled it in correctly, it shouldn’t take more than ten weeks to get an LPA registered. Getting the forms completed and signed by everyone who needs to sign it is not part of the registration timeline, so it could be longer.

How much does it cost?

It costs £82 to register an LPA, but under some circumstances the application fee is lower. For example, if the donor’s income is under £12,000, they could get 50% off, or not have to pay at all if they receive certain benefits. So, whether or not you get a fee reduction or waiver depends on how much you earn.

It’s also worth noting that the application fee applies for each type of Power of Attorney, so if you want both a health & welfare one and a finance one, be prepared to pay £164, unless you qualify for a reduction or waiver.

What if I change my mind, will it be too late?

A power of attorney lasts until it’s ended, which can happen for a range of reasons. This can be automatically if the donor dies, or if the attorney dies (and there are no replacement attorneys) or loses capacity. It can also be ended manually by a donor who still has capacity - but to do this, you’ll have to send the original power of attorney along with a letter called a ‘deed of revocation’ to the Office of the Public Guardian.

Are there any alternatives?

Some banks and essential services providers like water, gas and electricity companies allow customers to nominate someone to help manage their account.

At Touco, we are actively working to provide you with more tools and products to manage the finances of someone you care for without all the hassle and complexity of a Power of Attorney.

Do I need one to use Touco?

No. At Touco we’re all about building products that support different ways of helping someone to manage their finances. Our current app is powered by Open Banking and is open to carers with or without a Power of Attorney.

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