CHAPTER TWO – TYPES OF LPA
1. Introduction
Lasting Powers of Attorney were designed to be deceptively simple. At their core, they allow a person (the donor) to choose trusted individuals (attorneys) to take decisions on their behalf if they lose mental capacity in the future. Yet the statutory framework set out in the MCA 2005, combined with the variation in donors’ personal, financial and familial circumstances, means that LPAs operate on far more than a simple administrative level.
This chapter examines the evolution, purpose and operation of the different types of LPAs: Property and Financial Affairs LPAs and Health and Welfare LPAs. Although donors and professionals frequently treat LPAs as standardised forms, the real skill lies in recognising that these instruments can be moulded to suit a donor’s personal and financial structure. At their best, LPAs ensure continuity, protect vulnerable individuals from exploitation and reflect their personal values even long after they lose decisional capacity. At their worst, poorly drafted LPAs can give rise to disputes, facilitate financial abuse, or impose burdensome duties on attorneys who lack the skills, temperament or impartiality to perform the role. To navigate these tensions, a detailed understanding of each type of LPA is essential.
2. Property and Financial Affairs LPAs
2.1 Purpose and Scope
A Property and Financial Affairs LPA authorises attorneys to make decisions about the donor’s financial life. As explained at paragraph 7.36 of the MCA 2005 Code of Practice:
If a donor does not restrict decisions the attorney can make, the attorney will be able to decide on any or all of the person’s property and financial affairs. This might include:
- buying or selling property
- opening, closing or operating any bank, building society or other account
- giving access to the donor’s financial information
- claiming, receiving and using (on the donor’s behalf) all benefits, pensions, allowances and rebates (unless the Department for Work and Pensions has already appointed someone and everyone is happy for this to continue)
- receiving any income, inheritance or other entitlement on behalf of the donor
- dealing with the donor’s tax affairs
- paying the donor’s mortgage, rent and household expenses
- insuring, maintaining and repairing the donor’s property
- investing the donor’s savings
- making limited gifts on the donor’s behalf (but see paragraphs 7.40–7.42 below)
- paying for private medical care and residential care or nursing home fees
- applying for any entitlement to funding for NHS care, social care or adaptations
- using the donor’s money to buy a vehicle or any equipment or other help they need
- repaying interest and capital on any loan taken out by the donor.
Perhaps uniquely among personal-delegation instruments in English law, the Property and affairs LPA sits at the intersection of private fiduciary responsibility and public statutory oversight. The donor appoints the attorney, but the attorney’s legal obligations, including the fiduciary duties, duties of care and duties of loyalty, are grounded in statute, and supervised (to a limited extent) by the Office of the OPG.
As Senior Judge Lush (as he was) noted in The OPG v C [2013] EWCOP 2965:
“22. People who have the capacity to manage their own financial affairs are generally not accountable to anyone and don’t need to keep accounts or records of their income and expenditure. They can do whatever they like with their money, and this includes doing nothing at all. They can stash their cash under the mattress, if they wish and, of course, they are entitled to make unwise decisions.
- None of these options are open to an attorney acting for an incapacitated donor, partly because of their fiduciary obligations and partly because an attorney is required to act in the donor’s best interests. The MCA 2005, section 1(5), states that, “an act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in his best interests.””
A Property and affairs LPA may be used before the donor loses capacity if the donor consents to this. Many donors choose this option so that their attorneys can help manage complex financial portfolios, assist with daily administration such as paying bills, or act in circumstances where the donor is physically incapacitated but retains mental capacity.
Others prefer to restrict the attorney’s powers so they can only act when the donor actually loses capacity; this is often preferred where donors are concerned about preserving autonomy or minimising risk of financial abuse. The MCA 2005 accommodates both approaches, but the starting point remains that attorneys must follow the principles in section 1 and act in the donor’s best interests.
In practice, drafting a Property and affairs LPA involves a balance between flexibility and control. A broadly drafted LPA gives attorneys the discretion they need to deal with situations that cannot be predicted in advance. However, instruments that are too open-ended can worry donors and increase the scope for disagreement or mistrust among family members, particularly where large sums of money or valuable assets are involved.
Effective drafting must also look ahead to the donor’s likely future needs. A donor with significant investments may need attorneys with experience of managing portfolios and understanding financial risk. A donor who owns rental properties may require attorneys who can discharge the legal and practical responsibilities of a landlord. Where family relationships are complex—for example, in second marriages, blended families or situations involving estranged adult children—careful attorney selection and, where appropriate, supporting guidance can help reduce the risk of later conflict. In many cases, these considerations mean that the choice of attorney is ultimately more important than the detailed wording of the LPA itself.
2.2 Attorney Powers and Limits
Although a property and affairs LPA confers wide authority, that authority is carefully circumscribed by statute and cannot be expanded by the donor or the attorney. The Mental Capacity Act 2005 draws clear boundaries around what a property and affairs attorney may not do:
- First, an attorney’s power to make gifts is strictly limited by section 12 MCA 2005. Attorneys may make only small, customary gifts on occasions such as birthdays, weddings or religious festivals, and charitable donations that the donor might reasonably have been expected to make. Any gift outside that narrow scope, whether by size, frequency or purpose, requires the approval of the Court of Protection. Case law has consistently treated unauthorised gifting as a serious breach of duty and a common basis for removal.
- Secondly, an attorney cannot make or amend a will on the donor’s behalf. Testamentary decisions fall outside the scope of attorney authority and may only be made by the court through a statutory will under section 18(1)(i) MCA 2005. Any attempt by an attorney to influence succession planning without court approval risks being treated as an abuse of position.
- Third, some decisions are so personal that they can never be made by an attorney. An attorney cannot vote on the donor’s behalf or exercise any political rights for them. These decisions must always be made by the individual themselves and cannot be delegated, even where the donor lacks capacity.[1]
Attorneys are also prohibited from delegating their authority. While they may take professional advice or instruct agents, for example solicitors, accountants or investment managers, the decision-making responsibility remains with the attorney. This reflects general fiduciary principles and is reinforced by the MCA Code of Practice (Chapter 7), which makes clear that attorneys must not abdicate their role.
Conflicts of interest are a further area of strict control. Attorneys may not benefit from their position or place themselves in a position of conflict unless the LPA expressly authorises it or the court gives approval. Self-dealing, preferential treatment or use of the donor’s assets for the attorney’s own benefit is incompatible with the duty to act in the donor’s best interests under section 4 MCA 2005. The Court of Protection has repeatedly emphasised that even well-intentioned conflicts can justify intervention where they undermine trust or transparency.
2.3 Common Practice Issues
Several recurring issues emerge across practice:
- Pressure from family members: Attorneys may find themselves pressured by siblings, spouses or other relatives to distribute funds, make gifts, or take decisions that fall outside the statutory best interests test.
- Capacity disputes: There is often uncertainty over whether the donor has lost capacity for certain decisions, especially financial ones. Attorneys must follow the statutory test and may be criticised if they act prematurely.
- Use of professional attorneys: Increasingly, donors appoint solicitors, accountants or professional deputies as attorneys. This provides expertise but may raise cost concerns or create tension with family members.
- Banks’ response to LPAs: Despite official guidance, financial institutions vary significantly in how they interpret and process LPAs. This inconsistent operational practice can complicate attorneys’ roles.
Overall, the Property and affairs LPA remains the most widely used LPA type, reflecting the reality that financial incapacity is often the earliest practical manifestation of cognitive impairment. For that reason, these instruments continue to play a central role in both safeguarding donors and supporting families.
3. Health and Welfare LPAs
3.1 Purpose and Scope
A Health and Welfare LPA allows attorneys to make decisions about the donor’s personal welfare, including where the donor lives, what care or support they receive, their day-to-day routine, and—if the donor has given express authority, decisions about life-sustaining treatment.
Unlike a property and affairs LPA, a Health and Welfare LPA can only be used once the donor lacks capacity to make the relevant decision. This is an express statutory safeguard set out in section 11(7) MCA 2005. Even where a Health and Welfare LPA exists, the attorney has no authority to act while the donor remains capable of deciding the matter for themselves.
This restriction reflects the core principles of the MCA 2005, particularly the presumption of capacity and the requirement that a person is not to be treated as unable to make a decision unless all practicable steps have been taken to help them do so (section 1(2)–(3)). Health and welfare decisions are often intensely personal and closely tied to an individual’s dignity, identity and bodily integrity. Parliament has therefore drawn a clear line: decision-making authority does not pass to attorneys simply because an LPA exists, but only when capacity is lost in relation to the specific decision at hand.
As explained at paragraph 7.21 of the MCA 2005 Code of Practice, a Health and Welfare LPA may confer authority to make a wide range of personal welfare decisions:
LPAs can be used to appoint attorneys to make decisions about personal welfare, which can include healthcare and medical treatment decisions. Personal welfare LPAs might include decisions about:
- where the donor should live and who they should live with
- the donor’s day-to-day care, including diet and dress
- who the donor may have contact with
- consenting to or refusing medical examination and treatment on the donor’s behalf
- arrangements needed for the donor to be given medical, dental or optical treatment
- assessments for and provision of community care services
- whether the donor should take part in social activities, leisure activities, education or training
- the donor’s personal correspondence and papers
- rights of access to personal information about the donor
- complaints about the donor’s care or treatment.
The Health and Welfare LPA therefore operates across a wide range of settings, including community care, social work practice, mental health services, hospital treatment and decisions about moving into residential accommodation.
It is also arguable the type of LPA that engages directly with Convention rights under the European Convention on Human Rights, most notably Article 8 (respect for private and family life) and, where life-sustaining treatment decisions arise, Article 2 (the right to life).
3.2 Life-Sustaining Treatment Authority
The ability to grant attorneys power over life-sustaining treatment is distinctive. The donor must expressly choose to give this authority; it cannot be implied. This choice interacts with advance decisions to refuse treatment (ADRTs): if both exist, the most recent legally valid expression of the donor’s wishes will take precedence.
The MCA 2005 thus creates a coherent hierarchy of planning instruments, but misunderstandings are common in practice. Attorneys must understand that even where they hold such authority, they must still apply the best interests test, taking into account the donor’s wishes, values and beliefs. They cannot impose their own views about quality of life or medical treatment.
[1] Section 29 MCA 2005