You may know that a power of attorney is a document that allows somebody else to make decisions for you, but did you know that there are actually different types of power of attorney?

A General Power of Attorney is a legal way of letting someone handle your legal or financial matters, like managing your bank accounts or signing documents on your behalf. It’s only active as long as you’re still able and capable of making your own decisions.

It can be set for a certain time or specific tasks, and can usually remain valid for up to 12 months, but it automatically stops being valid if you become unable to make your own decisions. You do not need to register a GPA for it to become effective - it’s in place as soon as the document is signed and witnessed.

Lasting Power of Attorney Compared to GPA

A Lasting Power of Attorney (LPA) is set up to last longer than a GPA and works even if you lose the ability to make decisions for yourself (i.e. you no longer have mental capacity).

There are two types of LPA: one for financial decisions, and one for health-related decisions. You may opt for either or both, depending on your needs.

To start using an LPA, it must be registered with the Office of the Public Guardian, and it stays in effect until you cancel it or pass away.

Legal Requirements and Registration Process

Creating a GPA is fairly simple. You need to draft a document specifying the powers you are giving and any limits. There’s no need to register this document, but make sure it’s drafted correctly, signed, and witnessed.

Keep the original safe because your appointed person will need to show it when acting for you.

Situations Where a GPA is Best

A General Power of Attorney is best used in situations where you need someone to handle your affairs for a short period. For example, if you're travelling abroad and need someone to manage your finances at home, or if you're temporarily out of action due to surgery and need someone to pay your bills.

Because a GPA is void if you lose mental capacity, it's perfect for short-term, specific tasks.

Situations Where an LPA is Best

A Lasting Power of Attorney is best if you're planning for situations where you might lose mental capacity permanently, such as ageing or illness.

An LPA ensures that someone can manage your financial affairs and make health care decisions according to your wishes, even if you're no longer able to make those decisions yourself.

Read more about LPA costs