Gen­er­al Power of At­torney vs Lasting Power of At­torney

In the UK, choos­ing the right type of Power of At­torney is very im­port­ant, and the cor­rect choice for you de­pends on whet­h­er you need short-term or long-term ar­range­ments.

In this Aatos art­icle, we will ex­plore the dif­fer­ences between Gen­er­al Power of At­torney (GPA) and Lasting Power of At­torney (LPA), in­clud­ing their roles, the cir­cum­stances under which each is used, and their legal im­plic­a­tions.

Gen­er­al Power of At­torney Ex­plained

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

An 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.

Create Your LPA Already Today

Legal Re­quire­ments and Re­gis­tra­tion Pro­cess

The legal re­quire­ments and re­gis­tra­tion pro­cesses between the doc­u­ments varies. Next, we'll focus on how these are done in prac­tice.

Gen­er­al Power of At­torney

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.

Lasting Power of At­torney

In the UK, you can set up sep­ar­ate Lasting Powers of At­torney (LPAs) for fin­an­cial de­cisions and health/wel­fare de­cisions.

For fin­an­cial de­cisions re­lated to business af­fairs or other prop­erty and money mat­ters, you would need to down­load and com­plete the LP1F Form (LPA for Fin­an­cial De­cisions).

For de­cisions re­lated to health and per­son­al wel­fare, you would need the LP1H Form (LPA for Health and Wel­fare De­cisions).

The pro­cess for each type of LPA is as fol­lows

1. Down­load the rel­ev­ant form (LP1F or LP1H) from the gov.uk web­site.
2. Com­plete the form with all re­quested de­tails about yourself, your at­tor­neys, how they should make de­cisions (jointly, in­de­pend­ently, etc.), and any in­struc­tions/pref­er­ences.
3. Choose your at­torney(s) to be ap­poin­ted.
4. Have the com­pleted form wit­nessed.
5. The form also needs to be signed by a ‘’cer­ti­fic­ate provider’’ who is either a pro­fes­sion­al with rel­ev­ant skills (e.g. a doctor or lawyer) or someone that’s known you for more than 2 years. They will need to con­firm that no one is for­cing you to make an LPA and you un­der­stand what you are doing. 
6. Submit the com­pleted forms and pay­ment to the Office of the Public Guardi­an for re­gis­tra­tion, which can take around 10 weeks.

Once re­gistered, the Fin­an­cial LPA can be used either im­me­di­ately upon re­gis­tra­tion or when you lose mental ca­pa­city, de­pend­ing on the pref­er­ences spe­cified in the form.

The Health and Wel­fare LPA comes into effect only when you lose mental ca­pa­city. This means that the at­torney(s) ap­poin­ted under the Health and Wel­fare LPA can make de­cisions about your health and wel­fare only when you are unable to make those de­cisions for yourself due to mental in­ca­pa­city.

Read more about Re­gis­ter­ing the LPA

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

Prac­tical Con­sid­er­a­tions

When de­cid­ing whet­h­er a GPA or an LPA is right for you, con­sider your per­son­al, fin­an­cial, and health cir­cum­stances.

For in­stance, if you have a com­plex fin­an­cial situ­ation and foresee the pos­sib­il­ity of losing your abil­ity to manage it, an LPA for fin­an­cial de­cisions might be wise.

On the other hand, if your main con­cern is en­sur­ing someone can make medical de­cisions for you if you become unable to do so, an LPA for health and wel­fare would be more suit­able.

Ex­amples

• GPA Ex­ample: You are plan­ning a six-month sab­bat­ical to travel the world and need someone to manage your rental prop­er­ties and pay taxes in your ab­sence. A GPA would be ap­pro­pri­ate here.
• LPA Ex­ample: You have been dia­gnosed with a pro­gress­ive medical con­di­tion that will likely impair your cog­nit­ive abil­it­ies. Set­ting up an LPA would be a wise choice to make sure that your fin­an­cial and health­care pref­er­ences are re­spec­ted and man­aged without in­ter­rup­tion.

In con­clu­sion, de­cid­ing between a Gen­er­al Power of At­torney and a Lasting Power of At­torney de­pends on what you need the power of at­torney for.

Whet­h­er you need short-term as­sist­ance or long-term plan­ning, un­der­stand­ing each option will help you to make the de­cision right for your spe­cif­ic cir­cum­stances, en­sur­ing that your af­fairs are man­aged ac­cording to your wishes.