Mental Capacity and decision making
With luck and good health on your side, you may retain your mental capacity throughout your life. However, if your mental capacity deteriorates either temporarily or permanently, you may not be able to continue to make the decisions you normally make about your finances, investments, payment of bills, where you live and who you see.
If that were to happen, you may have someone in mind who you would trust to make these decisions on your behalf. In order for them to have the legal authority to make these decisions for you, they will need one of the following:
Power of Attorney – created by you appointing your choice of Attorney(s) before you lose your mental capacity:
- Enduring Power of Attorney (EPA) – this is what the document was called before the law changed in October 2007. They are still valid if they were signed before October 2007 but no new EPAs can be created. EPAs only relate to your property and financial affairs
- Lasting Power of Attorney (LPA) – the new documents to replace EPAs were introduced in October 2007 and are still used today. There are two types of LPA – one relating to your property and financial affairs and the other to your health and welfare. It is possible to have one without the other
Deputyship Order – obtained after you have lost mental capacity by someone applying to the Court of Protection. Such an order can relate to your property and financial affairs or to your health and welfare, or both.
Lastly, there is a General Power of Attorney. This is a much more straightforward document in which you can give legal authority to your Attorney to act on your behalf in financial matters. However, this document is only effective while you still have your mental capacity and is therefore much more limited in its uses.
The Wills and Estates team at TSP have created a guide to help you understand how you can plan for the future. It explains the nature of the options available to you and the effect on your family and friends if you have these documents in place, and if you do not.