Key Facts
- The Mental Capacity Act 2005 established two types of LPA because financial decisions and health decisions require different skills, different knowledge, and often different people.
- A property and financial affairs LPA gives your attorney the legal authority to manage your money and property on your behalf.
- A health and welfare LPA gives your attorney the authority to make decisions about your medical treatment, care, and daily life.
- Only if you specifically grant this power.
- The most important practical difference is when each type can be used.
The two types of Lasting Power of Attorney in England and Wales, and they cover completely different areas of your life. A property and financial affairs LPA deals with your money, property, and financial decisions. A health and welfare LPA deals with your medical treatment, daily care, and where you live.
Understanding the difference between the two types of Lasting Power of Attorney is essential because each one protects a different part of your life. Most people need both, but each must be created and registered as a separate document with its own application and its own fee.
Why There Are Two Separate Types of LPA
The Mental Capacity Act 2005 established two types of LPA because financial decisions and health decisions require different skills, different knowledge, and often different people. A person you trust to manage your bank accounts may not be the right person to make decisions about your medical treatment.
The two types also work differently in practice. A property and financial affairs LPA can be used while you still have mental capacity, with your permission. A health and welfare LPA can only be used after you have lost the capacity to make the specific decision in question. These differences reflect the fact that financial management can be delegated voluntarily, while health decisions remain yours to make for as long as you are able.
What a Property and Financial Affairs LPA Covers
A property and financial affairs LPA gives your attorney the legal authority to manage your money and property on your behalf. The scope is broad, covering virtually every financial decision you would normally make yourself.
Under a registered property and financial affairs LPA, your attorney can:
- Manage your bank accounts, pay bills, and handle day to day finances
- Buy, sell, or rent property on your behalf
- Deal with your tax affairs, benefits, and pension
- Make investment decisions and manage savings
- Pay for your care home fees or other care arrangements
One important distinction is that a financial LPA can be used before you lose capacity, as long as you give your permission. This makes it useful if you are physically unable to visit a bank or manage transactions, even though your mind is perfectly clear.
What a Health and Welfare LPA Covers
A health and welfare LPA gives your attorney the authority to make decisions about your medical treatment, care, and daily life. This is the type of LPA that ensures your wishes are followed when you can no longer communicate them yourself.
Under a registered health and welfare LPA, your attorney can:
- Make decisions about your medical treatment, including consenting to or refusing treatment
- Decide where you live, including whether you move into a care home
- Make choices about your daily routine, diet, and personal care
- Decide who you have contact with
A health and welfare LPA can only be used when you lack the mental capacity to make the specific decision being considered. Your attorney cannot override your wishes while you are still capable of deciding for yourself.
Not sure where to start with your LPA?
Download our free Lasting Power of Attorney Checklist or book a free consultation with our estate planning team.
Can Your Attorney Make Decisions About Life Sustaining Treatment?
Only if you specifically grant this power. When creating a health and welfare LPA, you are asked whether your attorney should have the authority to give or refuse consent to life-sustaining treatment on your behalf. This is a separate decision that you must actively choose to include.
If you choose not to give your attorney this power, decisions about life sustaining treatment will be made by medical professionals in your best interests. Many people find this an uncomfortable topic to think about, but recording your wishes in advance gives you control over how those decisions are made.
What Is The Key Differences Between the Two Types of LPA?
The most important practical difference is when each type can be used. A property and financial affairs LPA can be used as soon as it is registered, even while you have full mental capacity. A health and welfare LPA can only be used after you have lost capacity for the specific decision in question.
The second key difference is the type of decisions covered. Financial LPAs deal with money, property, and assets. Health LPAs deal with care, treatment, and daily welfare. There is no overlap between the two, which is why most estate planners recommend making both.
The third difference is that you can name different attorneys for each type. You might want your spouse to handle financial matters but your adult child, who is a nurse, to make health decisions. The flexibility to separate these roles is one of the strengths of the LPA system.
Why Most People Need Both Types of LPA
Having only one type of LPA leaves a significant gap in your protection. If you have a financial LPA but not a health and welfare LPA, nobody has the legal authority to make decisions about your medical treatment or care arrangements. If you have a health LPA but not a financial one, nobody can access your bank accounts to pay for that care.
How to Decide Who Should Be Attorney for Each Type of LPA
You can appoint the same person as attorney for both types of LPA, or you can choose different people. The right decision depends on your circumstances and the strengths of the people you trust.
For a property and financial affairs LPA, consider someone who is financially responsible, organised, and comfortable managing money. For a health and welfare LPA, consider someone who understands your values, knows what kind of care you would want, and is willing to advocate firmly on your behalf with medical professionals.
Whichever attorneys you choose, discuss your wishes with them before completing the LPA. Your attorneys need to understand your preferences and values so they can act in the way you would want.
How At Elwyn & Mabel, we help You Choose the Right Type of LPA
At Elwyn & Mabel Estate Planning, the consultation process helps you understand exactly which types of lasting power of attorney you need and why. The team explains the practical differences, helps you think through who should be your attorneys for each type, and drafts both documents to ensure they work together properly.
In practice, most people assume creating a Lasting Power of Attorney is a simple form filling exercise. We have found that clients are consistently surprised by the nuances involved: the options around attorney structure, how attorneys must act, what their rights and responsibilities are, and how the document needs to be tailored to individual circumstances. Once people understand the full picture, they start to appreciate just how powerful the document actually is.
Frequently Asked Questions About the Types of LPA
Can I make just one type of LPA or do I have to make both?
You can make one type or both. There is no legal requirement to make both. However, most estate planners strongly recommend both because having only one type leaves a significant gap in your protection. If you can only make one initially, a property and financial affairs LPA is usually the priority because it can be used immediately upon registration.
Can my attorneys use a health and welfare LPA while I still have capacity?
No. A health and welfare LPA can only be used when you lack the mental capacity to make the specific decision in question. As long as you can understand, retain, and communicate your decision, the LPA does not give your attorney any authority. A property and financial affairs LPA is different and can be used with your consent while you still have capacity.
What Is Understand Both Types of LPA Before You Start?
If you are considering setting up a Lasting Power of Attorney, the free LPA Checklist from Elwyn & Mabel breaks down both types in plain English so you know exactly what each one covers and which attorneys to choose. Download it below.
TL;DR: The Two Types of LPA Explained
The two types of Lasting Power of Attorney in England and Wales, each covering a different part of your life.
- A property and financial affairs LPA covers money, property, bills, tax, and investments. It can be used while you still have capacity.
- A health and welfare LPA covers medical treatment, care decisions, and where you live. It can only be used when you lack capacity.
- You can appoint different attorneys for each type based on who is best suited to each role.
- Most people need both types. Having only one leaves a significant gap in protection.
- Creating both types of Lasting Power of Attorney at the same time is more cost effective and ensures you are fully protected for both financial and personal welfare decisions.
More From Elwyn & Mabel
Download the free LPA Checklist: Get a plain English, step by step checklist covering everything you need to know about setting up a Lasting Power of Attorney. Download your free copy today.
Book a free consultation: Speak with our team at Elwyn & Mabel about your Lasting Power of Attorney. There is no cost and no obligation.