When to Use a Lasting Power of Attorney UK (2026): P&FA vs Health & Welfare — When Each Can Be Used

A Property and Financial Affairs LPA (P&FA LPA) gives the attorney authority over the donor's property, money, bank accounts, investments, property sales, and financial decisions. It can be used in two different scenarios depending on its terms: (1) WHILE THE DONOR HAS CAPACITY — IF THE LPA PERMITS: most P&FA LPAs are drafted to allow the attorney to act at any time — not just when the donor lacks capacity. The standard OPG form includes a preference (Continuation Sheet 2) for the donor to specify whether the LPA can be used while they have capacity or only when they lack it. If the LPA expressly permits use while the donor has capacity: (a) the attorney can assist the donor with banking, paying bills, and managing finances while the donor is fully capable; (b) the donor retains full authority alongside the attorney — the LPA does not remove the donor's own powers; (c) this is particularly useful for: elderly donors who want help with online banking; people travelling or working abroad who need someone to manage bills; those facing a short-term illness or hospital stay; anyone who wants to reduce the administrative burden of day-to-day money management; (2) WHEN THE DONOR LACKS CAPACITY: if the LPA is restricted to use only when the donor lacks capacity (or once incapacity arises), the attorney may only act once the donor cannot manage that particular financial decision themselves. The attorney must follow the Mental Capacity Act 2005 best interests framework; (3) THE LPA MUST BE REGISTERED FIRST: CRITICAL — a P&FA LPA cannot be used until it is registered with the Office of the Public Guardian (OPG). An unregistered LPA is worthless to the attorney. Registration takes 9–20 weeks from the application date. The donor must apply well in advance; (4) WHAT THE ATTORNEY CAN DO: manage bank and savings accounts; pay bills and regular commitments; receive the donor's pension and benefits; buy and sell property; manage investments; deal with HMRC; run a business if the LPA covers business affairs; deal with benefits and welfare payments; (5) WHAT THE ATTORNEY CANNOT DO: make a will for the donor (that requires a Court of Protection order); act in ways that conflict with the donor's interests; make large gifts without Court of Protection authorisation.

A Health and Welfare LPA gives the attorney authority over medical treatment decisions, care arrangements, where the donor lives, and day-to-day personal welfare decisions. Its use is strictly limited by law: (1) ONLY WHEN THE DONOR LACKS CAPACITY — NO EXCEPTIONS: under Mental Capacity Act 2005 s.11(7)(a), a Health and Welfare LPA may ONLY be used when the donor lacks capacity to make the specific decision at the time it needs to be made. This is a hard statutory rule — there is NO option in the LPA form to allow use while the donor has capacity. Even if the donor asks the attorney to act, the attorney should not act under the H&W LPA unless the donor lacks capacity for that specific decision; (2) THE DECISION-SPECIFIC CAPACITY TEST (MCA 2005 ss.2-3): capacity is assessed decision by decision — a person may lack capacity for one decision while retaining capacity for another. The test: (a) the person has an impairment of, or disturbance in, the functioning of their mind or brain (diagnostic threshold); (b) AND as a result, they are unable to: understand the information relevant to the decision; OR retain it long enough to use it; OR use or weigh it as part of the decision-making process; OR communicate the decision. All four limbs of (b) are in the alternative — any one of them suffices; (3) THE PRESUMPTION OF CAPACITY (MCA 2005 s.1(2)): a person is presumed to have capacity unless there is evidence to the contrary. An attorney cannot simply assume the donor lacks capacity because they are elderly or have a diagnosis. A formal capacity assessment should be done for significant decisions; (4) WHAT THE H&W ATTORNEY CAN DO (ONCE INCAPACITY IS ESTABLISHED): decide where the donor lives; decide on care arrangements (home care; residential care); consent to or refuse medical treatment; day-to-day personal care (food; clothing; hygiene); (5) LIFE-SUSTAINING TREATMENT: an H&W attorney can consent to or refuse life-sustaining treatment ONLY IF the LPA expressly grants this authority (the LPA form has a specific box the donor must tick). Without that authority, the attorney cannot make life-sustaining treatment decisions — only the Court of Protection can; (6) WHAT THE H&W ATTORNEY CANNOT DO: make financial decisions (that requires a P&FA LPA); override a valid advance decision to refuse treatment (ADRT) made by the donor before losing capacity; act against the best interests of the donor.

Attorneys under both types of LPA have limited power to make gifts, governed by Mental Capacity Act 2005 s.12: (1) THE GENERAL RULE — LIMITED GIFTS ONLY: an attorney acting under an LPA may only make gifts that fall within the restrictions in MCA 2005 s.12. These are narrow restrictions. An attorney does NOT have the same freedom to give away the donor's money as the donor would have had; (2) WHAT GIFTS ARE PERMITTED UNDER MCA 2005 s.12: (a) CUSTOMARY OCCASION GIFTS: gifts to people connected with the donor on occasions where gifts would customarily be made. Examples: birthday gifts; Christmas gifts; wedding or civil partnership anniversary gifts; retirement gifts. The gift must be to a person connected with the donor (family; friends; colleagues); (b) CHARITY GIFTS: gifts to charities to which the donor made gifts or might be expected to make gifts. Regular charitable giving can continue; (c) THE AMOUNT MUST BE REASONABLE: even customary and charitable gifts must be 'not unreasonable having regard to all the circumstances and, in particular, the size of the donor's estate' (MCA s.12(2)). An attorney cannot make large birthday gifts just because the donor used to do so; (3) WHAT IS NOT PERMITTED WITHOUT COURT AUTHORISATION: (a) gifts above what MCA s.12 permits; (b) IHT planning gifts (large annual gifts; significant PETs); (c) gifting assets to reduce the donor's estate for care fee purposes; (d) making gifts to the attorney themselves (unless the LPA expressly permits it and the OPG has been notified); (4) COURT OF PROTECTION AUTHORISATION: to make larger gifts — for example, to use the donor's annual IHT exemption (£3,000) or to make gifts for tax planning purposes — the attorney must apply to the Court of Protection for a specific order. The court will consider whether the gifts are in the donor's best interests; (5) PRACTICAL EXAMPLE: an attorney wants to give £50,000 to the donor's children as part of a PET-based IHT planning strategy. This CANNOT be done under the LPA without court approval — it is well above the MCA s.12 limit. The attorney must apply to the Court of Protection, which will consider whether such gifts are in the donor's best interests.

Understanding the limits of an LPA is as important as understanding what it permits: (1) THE LPA MUST BE REGISTERED: neither type of LPA can be used until it is registered with the Office of the Public Guardian (OPG). An unregistered LPA has no legal effect. A family member who shows a bank an unregistered LPA will be refused. The OPG registration process takes 9–20 weeks from application — do NOT wait for a crisis; register as soon as the LPA is signed; (2) CANNOT MAKE A WILL: an attorney under a P&FA LPA cannot make or change a will on the donor's behalf. Only the donor can make a will while they have testamentary capacity. If the donor has lost testamentary capacity, a statutory will (made by the Court of Protection) is the only option; (3) CANNOT ACT IN THEIR OWN INTERESTS AT THE DONOR'S EXPENSE: an attorney is a fiduciary — they must act in the donor's best interests. Purchasing the donor's house below market value; transferring assets to themselves; making loans to themselves without court approval — all are prohibited. Breach of this duty is a criminal offence (MCA 2005 s.44); (4) CANNOT ACT BEYOND THE LPA'S SCOPE: an attorney under a P&FA LPA has no authority over health and welfare decisions, and vice versa. To cover both domains, two separate LPAs are required; (5) CANNOT USE THE LPA ONCE IT IS REVOKED: an LPA is automatically revoked: (a) by the donor (if they have capacity to revoke — MCA 2005 s.13); (b) on the donor's death; (c) on bankruptcy of the donor (P&FA LPA only); (d) on the attorney's bankruptcy, loss of capacity, or death (unless there is a replacement attorney); (e) on dissolution of a marriage or civil partnership where the attorney is the donor's spouse (unless the LPA expressly provides otherwise); (6) CANNOT ACT WHERE THERE ARE RESTRICTIONS OR CONDITIONS IN THE LPA: the donor may have inserted specific restrictions in the LPA — for example, 'the attorney may not sell my main residence without the written consent of [named person]'. The attorney must comply with all such restrictions; (7) CANNOT DELEGATE AUTHORITY: an attorney cannot delegate the authority given by the LPA to another person (unless the LPA expressly permits delegation).

The most important question: what happens without an LPA? The consequences of incapacity with no LPA are severe: (1) WHAT HAPPENS WITHOUT AN LPA — THE COURT OF PROTECTION: if a person loses mental capacity and has no registered LPA, nobody has automatic legal authority to manage their finances or make welfare decisions. Even a spouse cannot access the other's bank accounts without specific authority. The only route: an application to the Court of Protection for a DEPUTYSHIP ORDER. A deputy is appointed by the court to manage the incapacitated person's affairs; (2) THE COST AND DELAY OF DEPUTYSHIP: a deputyship application typically costs £3,000–£5,000 in solicitor fees plus the court fee (£371 in 2025). The process takes 6–12 months. Annual reports to the OPG are required. The court can restrict what the deputy can do. An LPA costs £82 (OPG registration fee) and can be created in hours — compared to thousands of pounds and months of delay for a deputyship; (3) WHEN AN LPA IS MOST URGENTLY NEEDED: (a) ADVANCING AGE: anyone over 50 should have both LPAs registered and ready to use; (b) HEALTH DIAGNOSIS: any diagnosis of early-stage dementia, Parkinson's, stroke, or other condition affecting cognitive function — register both LPAs immediately before capacity deteriorates; (c) MAJOR SURGERY: unexpected complications can result in temporary or permanent incapacity; (d) OVERSEAS TRAVEL: a P&FA LPA ensures finances can be managed while abroad or inaccessible; (4) THE WINDOW IS CLOSING: once a person lacks testamentary or decisional capacity, they can no longer execute an LPA. The LPA must be executed while the person has capacity. If even one doctor certifies lack of capacity at the time of signing, the LPA is invalid; (5) THE CERTIFICATE PROVIDER REQUIREMENT: when signing an LPA, a certificate provider must confirm the donor has capacity and is not under undue influence. This is a safeguard — and it is why LPAs signed at the last moment, when capacity is borderline, may be challenged.