It’s not easy to think about a time when you won’t be able to make your own decisions, but it can help to be prepared.
What is mental capacity?
Mental capacity means the ability to make or communicate specific decisions at the time they need to be made. To have mental capacity you must understand the decision you need to make, why you need to make it, and the likely outcome of your decision.
Some people will be able to make decisions about some things but not others. For example, they may be able to decide what to buy for dinner, but be unable to understand and arrange their home insurance. Alternatively, their ability to make decisions may change from day to day.
Needing more time to understand or communicate doesn’t mean you lack mental capacity. For example, having dementia does not necessarily mean that someone is unable to make any decisions for themselves. Where someone is having difficulty communicating a decision, an attempt should always be made to overcome those difficulties and help the person decide for themselves.
However, if there does come a time when you’re unable to make your own decisions, you will have lost mental capacity and someone else may need to make decisions for you.
These could be decisions about:
- finances - paying your mortgage, investing your savings or buying items you need
- health and care - what you should eat, or what type of medical treatment you should have.
Different types of power of attorney
It’s important to be aware that there are different types of power of attorney and you may want to set up more than one. We'll explain:
- Ordinary Power of Attorney
- Lasting Power of Attorney
- Enduring Power of Attorney
What is an Ordinary Power of Attorney?
An Ordinary Power of Attorney allows one or more person, known as your attorney, to make financial decisions on your behalf. It is only valid while you still have mental capacity to make your own decisions. You may want to set one up if, for example:
- you need someone to act for you for a temporary period, such an when you’re on holiday or in hospital
- you’re finding it harder to get out and about to the bank or post office, or you want someone to be able to access your account for you
- you want someone to act for you while you’re able to supervise their actions.
You can limit the power you give your attorney so that they can only deal with certain assets, for example, your bank account but not your home.
It’s important to remember that an Ordinary Power of Attorney is only valid while you have mental capacity to make your own decisions. If you want someone to be able to act on your behalf if there comes a time when you don’t have mental capacity to make your own decisions you should consider a Lasting Power of Attorney.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a way of giving someone you trust, your attorney, the legal authority to make decisions on your behalf if you lose mental capacity at some point in the future, or if you no longer want to make decisions for yourself.
There are two types of LPA: an LPA for financial decisions and an LPA for health and care decisions.
LPA for financial decisions
An LPA for financial decisions can be used while you still have mental capacity or you can state that you only want it to come into force if you lose capacity.
An LPA for financial decisions can cover things such as:
- buying and selling property
- paying the mortgage
- investing money
- paying bills
- arranging repairs to property.
You can restrict the types of decisions your attorney can make, or let them make all decisions on your behalf.
If you’re setting up an LPA for financial decisions, your attorney must keep accounts and make sure their money is kept separate from yours. You can ask for regular details of how much is spent and how much money you have. This offers you an extra layer of protection. These details can be sent to your solicitor or a family member if you lose capacity.
LPA for health and care decisions
This covers health and care decisions and can only be used once you have lost mental capacity. An attorney can generally make decisions about things such as:
- where you should live
- your medical care
- what you should eat
- who you should have contact with
- what kind of social activities you should take part in.
You can also give special permission for your attorney to make decisions about life-saving treatment.
If you’re married or in a civil partnership, you may have assumed that your spouse would automatically be able to deal with your bank account and pensions, and make decisions about your healthcare, if you lose the ability to do so. This is not the case. Without an LPA, they won’t have the authority.
What is an Enduring Power of Attorney?
Enduring Powers of Attorney (EPA) were replaced by LPAs in October 2007. However, if you made and signed an EPA before 1 October 2007, it should still be valid.
You might already be using an EPA without having registered it, so that someone can act on your behalf. This is fine, until you become unable to make your own decisions relating to financial and property matters. Once this happens, your attorney must register your EPA before they can take any further action on your behalf.
An EPA only covers decisions about your property and financial affairs; an attorney doesn’t have power under an EPA to make decisions about your health and care. You might want to consider setting up an LPA for health and care decisions to work alongside the existing EPA.