What is a Power of Attorney?

A Power of Attorney (POA) is a legal document that allows you to appoint someone to manage your affairs. This document identifies you as the donor or grantor, while your appointed representative is typically called an attorney.

Your POA outlines the terms and conditions between you and your attorney while giving them the authority to assist you in financial, business, and even medical decision-making. 

Laws for your jurisdiction can govern aspects of a POA, such as who can be an attorney, what powers you can grant them, and what signing requirements are needed to make a valid document. 

Significance of Power of Attorney

In the UK, completing a Power of Attorney form ensures you stay in control of who manages your affairs and how they do it.

• Prepares for incapacity: With a Lasting POA, you choose who will manage your finances, property, health, or welfare if you become unable to make decisions on your own (for example, due to dementia or a serious injury). 

• However, in Northern Ireland, it only covers financial and property matters, and an Advance Decision is required to outline healthcare wishes.

• Prevents costly delays: Without a POA, your loved ones would need to apply to the Court of Protection (or the Office of Care and Protection in Northern Ireland) to handle your affairs—a process that can be lengthy and expensive.

• Protects your wishes: A POA clearly records your preferences, helping to prevent family disagreements and ensuring that decisions align with what you’d want.

• Provides legal authority: Your appointed attorney(s) can pay bills, manage savings and investments, handle property transactions, and make medical or care decisions, depending on the scope of the document.

• Gives peace of mind: You stay in control by deciding who acts on your behalf and setting out detailed guidance and safeguards. You can also appoint multiple attorneys to share responsibilities.

Types of Powers of Attorney

There are generally two types of Powers of Attorney. The type you make will determine when it comes into effect and what powers you grant your attorney. LawDepot’s questionnaire allows you to choose multiple options based on your needs and location. Let’s break it down:

1. Ordinary Power of Attorney

An Ordinary Power of Attorney is only valid when you can act for yourself. It stops being effective when you become incapacitated (e.g., you fall into a coma or develop dementia), pass away, or revoke it. Alternatively, it can end on a specified date. 

Generally, this form of POA is made temporarily and allows your attorney to act as you would in decision-making as long as they follow your jurisdiction’s laws. 

Ordinary POAs are helpful when you want to grant specific powers for a set period. For instance, you may be unavailable to manage your rental property due to extensive travel for work. In this case, you might make a POA for your attorney to manage your property while you’re unavailable. Then, you can revoke the POA when you return and are available again.

2. Lasting Power of Attorney (LPA)

A Lasting Power of Attorney remains valid if you become incapacitated. You must make an LPA when you can still make decisions for yourself. 

When you’re creating an LPA in England, Wales, or Scotland, you can grant powers in one of two general areas. These are:

• An LPA for property and financial affairs to grant decision-making authority for your assets and personal property
• An LPA for health and welfare to give authority to make decisions affecting your quality of life

Typically, this form of POA is called a Continuing Power of Attorney in Scotland. Whereas Northern Ireland calls it an Enduring Power of Attorney,

It’s important to note that Northern Irish citizens cannot create an LPA that grants medical authority. They can only make one for property and financial powers. If you’re in Northern Ireland, you should use a Living Will, also known as an Advance Decision, to specify preferences for health care that medical personnel can follow.

What is mental capacity for a Power of Attorney?

Mental capacity refers to a person’s ability to understand information, make decisions, and communicate those decisions about their own life and affairs. Mental capacity is crucial to creating a valid Power of Attorney (POA) because the document can only be created while the person granting authority (the donor) still possesses this ability.

A person is considered to have mental capacity if they can do all of the following:

• Understand the information relevant to a decision, and the consequences of their decision

• Retain that information long enough to make the decision

• Use or weigh that information as part of the decision‑making process

• Communicate their decision—whether verbally, in writing, or through other means

If someone cannot do one or more of these steps, they’re considered to lack mental capacity for that specific decision.

Why mental capacity matters for a POA

A Lasting Power of Attorney (LPA) can only be created while the donor has mental capacity. Once it’s executed, the LPA allows the appointed attorney(s) to act on the donor’s behalf if they later lose capacity—managing financial matters or making health and welfare decisions in line with the donor’s wishes.

The Mental Capacity Act 2005 (England and Wales) sets the rules for assessing capacity and protecting those who lack it. An attorney for property and financial affairs can act once the LPA is registered (unless it states otherwise), while an attorney for health and welfare can only act after the donor loses capacity, always in the donor’s best interests.

Mental capacity is decision‑specific, meaning someone may have the ability to decide certain things but not others. For Power of Attorney purposes, this distinction ensures attorneys act only when truly necessary to help maintain the donor’s independence for as long as possible.

Powers you can grant with a Power of Attorney form

Depending on your jurisdiction and the Power of Attorney you create, there are different powers you can grant your attorney. This includes:

Property and financial powers

Giving your attorney powers for property and finances allows them to help with personal and business matters. 

Personal property and financial tasks can be:

• Paying bills and a mortgage
• Collecting and recovering debt
• Maintaining and managing a rental property
• Changing retirement plans and accepting benefits
• Managing your estate and family concerns
• Selling property
• Filing taxes

You can also give power to your attorney to manage your business. They can oversee a company's best interest by making employment, budgetary, and investment decisions. Your attorney can also be a proxy in meetings and vote as a shareholder in your absence.

Health and welfare powers

If your Power of Attorney is created to include health and welfare, you can give decision-making authority for your medical needs. In England, Scotland, and Wales, your attorney can use your health care decisions set out in an Advance Decision to assist in medical authority. 

Health and welfare decisions include:

• Consent to or refuse medical treatments
• Consent to or refuse medical trials
• Decisions about where you live (e.g., in a care home or independently with support)
• Decisions about your day-to-day life (e.g., your diet and daily routine)

Reminder: These powers cannot be given to another person in Northern Ireland in a Power of Attorney. Instead, use a Living Will, also known as an Advance Decision, to specify health care preferences for medical personnel.

Powers you cannot grant

Restrictions for your attorney will vary depending on your jurisdiction. For example, when using an LPA in England or Wales, the Mental Capacity Act 2005 does not allow an attorney to make decisions regarding family relationships, make certain healthcare decisions, or appoint a substitute or successor attorney.  

Benefits and use cases of a Power of Attorney form

Completing a Power of Attorney form is one of the most effective ways to plan for the future. It allows someone you trust to manage your affairs if you are unable to do so (whether temporarily or long-term), while ensuring your wishes are respected.

Key benefits

• Peace of mind and control: A Power of Attorney gives you confidence that your chosen attorney(s) can make decisions for you if you lose capacity, helping you stay in control of who acts on your behalf.

• Avoids court delays: With a valid POA, your family won’t need to apply to the Court of Protection (or the Office of Care and Protection in Northern Ireland) for authority to act, which saves time, stress, and legal costs.

• Customisable and flexible: You decide who your attorney(s) are, what powers they have, and any conditions or safeguards to limit how those powers are used.

• Provides legal clarity: A POA is legally recognised, giving your attorney(s) clear authority to act and reducing the risk of confusion or disputes among family members.

Common use cases

• Short‑term situations: If you’re abroad, hospitalised, or recovering from an injury, your attorney can pay bills, manage accounts, or sign important documents on your behalf.

• Long‑term planning: For progressive illnesses like dementia, a POA ensures your finances, property, health, and welfare are managed as you intend when you can no longer make decisions yourself.

• Managing financial affairs: Attorneys can access bank accounts, pay household expenses, manage investments, collect pensions, or even sell property when necessary.

• Health and welfare decisions: If you’re unable to communicate your wishes, your attorney can decide on your medical treatment, care arrangements, or living situation.

• Business and estate continuity: If you own property, investments, or a business, your attorney can maintain operations, sign documents, and make decisions to ensure continuity.

How to set up a Lasting Power of Attorney

Setting up an LPA in the UK involves key steps to make it legally valid. You can create a Property and Financial Affairs LPA or a Health and Welfare LPA. 

However, in Northern Ireland, only financial and property matters are covered—health and welfare decisions must be made in an Advance Directive.

1. Choose your attorney(s)

Select one or more people you trust to manage your affairs. You can appoint attorneys to act jointly, jointly and severally, or in different roles, depending on the type of Power of Attorney.

Make sure each attorney is willing, reliable, and able to take on the responsibility—especially if they’ll manage financial or medical decisions on your behalf.

2. Complete the Power of Attorney form

There are separate forms for:

• Property and Financial Affairs — For handling bank accounts, property, pensions, or financial transactions

• Health and Welfare — For making decisions about healthcare, medical treatment, or living arrangements

Each form must be signed by:

• You (the donor)

• Your chosen attorney(s)

• A certificate provider who confirms you understand the document and aren’t being pressured (However, it’s not required in Northern Ireland)

• Any required witnesses, who must sign in the correct order for the Power of Attorney to be valid

3. Register the Power of Attorney

Once the form is completed and signed, it must be registered before it can be used, even if you don’t need it yet. In England and Wales, registration occurs with the Office of the Public Guardian (OPG), while in Northern Ireland, an Enduring Power of Attorney is registered with the High Court (Office of Care and Protection) only when the donor can no longer manage their own affairs. 

Registration usually takes 8 to 10 weeks if there are no errors or objections.

4. Pay the registration fee

The standard registration fee for each Lasting Power of Attorney (LPA) is £92 in England and Wales, while it’s £180 in Northern Ireland. You may qualify for a fee reduction or exemption based on your financial circumstances, as outlined on GOV.UK.

5. Notify relevant people (optional)

You can choose to notify certain people when you submit your LPA for registration, allowing them to raise any concerns. While optional, this step can add transparency and help prevent future disputes.

How to revoke Power of Attorney

You can revoke your Power of Attorney while you still have capacity. If you wish to update your document, you can create a new POA that states you revoke any previous ones. Alternatively, you can use a Revocation of Power of Attorney to void your current POA.

When you change or revoke a POA, you should inform any institutions that have the original on file and your attorneys. Then, ensure they have a copy of your new POA when applicable.