Power of Attorney: Ordinary or Lasting?

It takes time for some people to get their heads round the concept of a Power of Attorney. So to then find out that there are different kinds of this legal instrument makes it even more complicated.

But Power of Attorney is an important and useful legal tool to have in place, especially as you get older. 

We’ll cut through the jargon and explain what the different types of Power of Attorney do in plain English.

What is Power of Attorney and why is it important?

The basic principle of a Power of Attorney is that it gives someone legal permission to act on your behalf, in some or all circumstances, for important matters in your life. Simple as that.

What is not so simple is if and when you need someone to legally act on your behalf and you do not have a Power of Attorney in place, most typically because you have become mentally incapacitated. 

At this point, it is too late to set one up and your loved ones have to go through the courts – a long, arduous and expensive journey.

They may find that your bank accounts are frozen as you cannot authorise transactions, bills cannot be paid and important medical decisions are not made in line with your wishes or needs.

Ordinary Power of Attorney

An Ordinary Power of Attorney gives someone the authority to act on your behalf while you have mental capacity. 

Reasons for this might include if you are going to move overseas for a period and want someone to handle your affairs at home, or if you have a planned stay in hospital. It could also just be because you lack physical mobility.

You can specify what you want your attorney to have control over, so that their remit is not too wide. For example, your current bank account but not long-term savings or the house you live in.

Importantly, an Ordinary Power of Attorney is only valid while you retain your mental capacity.

Lasting Power of Attorney

If you know a little about Power of Attorney, this may be what comes to your mind.

You set up Lasting Power of Attorney to guard against future mental incapacity. Whilst you have sound mind, you identify someone (or more than one person) who you can trust to act in your best interests if you become unable to make your own decisions. For example, you are in a bad accident or develop dementia.

There are two types of Lasting Power of Attorney – one for financial decisions (paying bills, investing money, buying selling property etc) and one for health and care decisions (whether you should live in care, your diet, medical decisions etc). 

They are applied for separately, although many people will choose to get both at the same time.

While it is a lot of responsibility to hand over, it is generally a sensible thing for everyone to do: you never know what’s waiting for you round the corner. 

Lasting Power of Attorney only kicks in if you lose mental capacity and it may well never be activated. But as we said earlier, if it is suddenly required and is not in place, your loved ones face a legal struggle. 

This could compound the emotional difficulty they face at you losing your mental incapacity. 

No one, not even a spouse, has automatic Lasting Power of Attorney for you. You have to apply for it.

Enduring Power of Attorney

This was the predecessor to Lasting Power of Attorney. Enduring Power of Attorney stopped being issued in 2007. 

However, if you signed one before this date it should remain valid and achieve a similar outcome to Lasting Power of Attorney.

Need help?

Power of Attorney can be daunting to set up and it is important to follow the correct process. The consequences of getting it wrong can be serious. 

If you would like help deciding what is right for you and with applying, get in touch.