Understanding power of attorney and Care Home fees

‍A Lasting Power of Attorney (LPA) for property and financial affairs is the legal mechanism that allows a trusted person to manage care home fees, access funds, and handle financial decisions on behalf of someone who has lost mental capacity. Without one, families may face significant delays and costs through the Court of Protection.

When a loved one reaches the point of needing residential or nursing care, the financial decisions that follow are rarely straightforward. Understanding how Power of Attorney works, which type you need, and how it intersects with care home funding can make an enormous practical difference at an already difficult time.

Before exploring Power of Attorney in detail, it is worth reading our care home funding guide, which covers the means test, capital thresholds, deferred payment agreements, and NHS funding options in full.

What Is a Lasting Power of Attorney?

A Lasting Power of Attorney (LPA) is a legal document, registered with the Office of the Public Guardian, that authorises a named person to make decisions on behalf of someone who lacks — or may in future lack — the mental capacity to make those decisions themselves.

The LPA framework replaced the older Enduring Power of Attorney (EPA) in October 2007, when the Mental Capacity Act 2005 came into force. There are two distinct types of LPA, and they serve very different purposes.

Property and Financial Affairs LPA

This type of LPA authorises an attorney to manage the donor's financial life. In a care home context, this means the attorney can:

• Pay care home fees directly from the donor's bank accounts
• Access savings, pensions, and investment income to fund care
• Manage the sale of property if required to meet care costs
• Apply for means-tested local authority funding on the donor's behalf
• Claim benefits and entitlements the donor may be eligible for
• Enter into or manage a Deferred Payment Agreement with the local authority

Health and Welfare LPA

This type of LPA authorises decisions about medical treatment, living arrangements, and day-to-day personal care. It can only be used once the donor has lost mental capacity — it cannot be activated while the donor retains the ability to make their own decisions.

What Is an Enduring Power of Attorney?

An Enduring Power of Attorney (EPA) was the predecessor to the LPA, covering financial decisions only. EPAs created before October 2007 remain legally valid but must be registered with the Office of the Public Guardian when the donor begins to lose mental capacity.

If your family holds an older EPA document, it does not need to be replaced with an LPA — provided it was correctly executed before October 2007. However, unlike an LPA (which can be registered in advance as a precautionary measure), an EPA must be registered at the point the donor is losing capacity, not before. This can create delays if registration is left too late.

Why Does It Matter Whether an LPA Is Registered?

An unregistered LPA has no legal force. Banks, care homes, and local authorities cannot act on it. The LPA must be registered with the Office of the Public Guardian before it can be used for any purpose.

This is one of the most consequential misunderstandings families encounter. A signed but unregistered LPA document sitting in a drawer cannot be used to pay fees, access accounts, or make any financial decision. Registration must be completed — and confirmed — before the attorney has any legal authority to act.

The current published processing target at the Office of the Public Guardian is up to 20 weeks from the date of application. This means families who wait until a care crisis arises before registering an LPA may find themselves without access to funds for months. Setting up and registering an LPA well in advance of any anticipated need is strongly advisable.

What Happens If There Is No LPA?

If someone loses mental capacity without a registered LPA in place, their family cannot legally manage their finances without applying to the Court of Protection for a deputyship order. This process is significantly more expensive and time-consuming than registering an LPA.

The Court of Protection has jurisdiction over financial and welfare decisions for people who lack mental capacity under the Mental Capacity Act 2005. It can appoint a deputy — typically a family member or professional — to carry out the role an attorney would otherwise fulfil.

However, deputyship comes with ongoing court supervision, annual reporting requirements, and costs that typically run into several thousand pounds to establish, plus ongoing annual fees. By contrast, registering an LPA currently costs £82 per document (or £164 for both types), with fee exemptions available for those on low incomes.

The practical message is clear: establishing an LPA while the donor still has full mental capacity is significantly simpler, cheaper, and faster than the alternative.

How Does a Property and Financial Affairs LPA Work in Practice for Care Home Fees?

Once registered, a Property and Financial Affairs LPA allows the attorney to step into the donor's financial shoes — paying care fees, managing income, selling property if needed, and liaising with the local authority on funding assessments.

Care home fees in England vary considerably depending on the level of care required and the location of the home. Residential care typically costs between £800 and £1,200 per week, while nursing care ranges from approximately £900 to £1,500 per week, with specialist dementia care at the higher end of that range. These figures reflect the current market in 2026 and vary significantly between regions, with care in the South of England and London typically commanding higher fees than in the Midlands, North, or Wales.

An attorney with a registered Property and Financial Affairs LPA can take the following steps to manage these costs:

1. Notify the care home of the LPA and provide a certified copy of the registered document.
2. Access the donor's accounts by presenting the LPA to the relevant banks or building societies.
3. Apply for a means-tested financial assessment from the local authority to determine whether the donor qualifies for funding support.
4. Explore Deferred Payment Agreements if the donor owns property but has limited liquid capital — our guide to deferred payment agreements for care home fees explains how this works.
5. Manage any property transaction required to fund care, acting in the donor's best interests throughout.
6. Review ongoing fees and ensure contributions align with the financial assessment outcome.

For a full explanation of how the means test works — including the £23,250 upper capital limit and the lower capital limit of £14,250 — see our article on understanding care home fees and your finances.

"One of the most common situations we encounter is a family trying to sort out finances for a loved one already in care, without a registered LPA in place. It is genuinely difficult for everyone involved, and it delays access to funding support that the person may well be entitled to. If there is one thing we would encourage families to do before a crisis point, it is to get this sorted early." — Ashberry Healthcare

What Benefits Can an Attorney Claim on the Donor's Behalf?

An attorney with a registered Property and Financial Affairs LPA can apply for benefits and entitlements on the donor's behalf, including Attendance Allowance, Pension Credit, and NHS Continuing Healthcare.

Many families are unaware that care home residents — including self-funders — may still qualify for financial support through the benefits system. An attorney is well-placed to identify and claim these entitlements, which can meaningfully offset care costs.

Key benefits worth exploring include:

• Attendance Allowance: A non-means-tested benefit for those aged 65 or over who need help with personal care or supervision due to illness or disability. It is not reduced by savings or capital and can be claimed regardless of whether the recipient is self-funding.
• Pension Credit: A means-tested top-up to weekly income that may still be accessible even for those with modest savings, depending on their income level.
• NHS Continuing Healthcare (CHC): Full NHS funding for individuals whose primary care need is a health need rather than a social care need. CHC is not means-tested and covers the full cost of care if the person qualifies. Our guide to NHS Continuing Healthcare for care home residents sets out the assessment process in full.
• Funded Nursing Care (FNC): A flat-rate NHS contribution toward the nursing element of care in a nursing home, available to those who do not meet the full CHC threshold.

Our article on benefits available to self-funders covers each of these in detail.

What Are the Legal Responsibilities of an Attorney?

An attorney must act in the donor's best interests at all times, in accordance with the Mental Capacity Act 2005. They cannot use the donor's assets for personal benefit, make gifts beyond a reasonable level, or act outside the scope of the registered LPA.

The Mental Capacity Act 2005 sets out five statutory principles that govern how attorneys must behave:

1. A person must be assumed to have capacity unless it is established that they do not.
2. Every practicable step must be taken to help a person make their own decisions before concluding they cannot.
3. An unwise decision does not mean a person lacks capacity.
4. Any act or decision made under the Act must be done in the person's best interests.
5. Any act or decision must be the least restrictive option available.

In practical terms, this means attorneys must keep detailed financial records, avoid mixing the donor's finances with their own, involve the donor in decisions wherever possible, and seek legal or financial advice when uncertain.

Attorneys must also be aware of the rules around deprivation of assets. If an attorney transfers the donor's money or property in a way that appears designed to reduce the amount available for care funding, the local authority may treat those assets as still belonging to the donor for means-testing purposes. Our article on deprivation of assets explains where the legal boundaries lie.

How to Set Up a Lasting Power of Attorney

An LPA is set up by completing the official forms from the Office of the Public Guardian, having them signed by the donor, attorney, and an independent certificate provider, and then registering them — a process that currently takes up to 20 weeks.

The step-by-step process is as follows:

1. Choose the type of LPA — property and financial affairs, health and welfare, or both. Most families arranging care recommend registering both.
2. Select your attorney — this must be someone aged 18 or over who has mental capacity themselves. It can be a family member, friend, or professional such as a solicitor.
3. Appoint a certificate provider — an independent person who confirms that the donor understands the document and is not being pressured into signing it. This cannot be a family member.
4. Complete the official forms — available from the Office of the Public Guardian at gov.uk/power-of-attorney. Online and paper options are available.
5. Sign in the correct order — the donor must sign first, followed by the certificate provider, then the attorney. Errors in signing order invalidate the document.
6. Submit to the OPG for registration — the current fee is £82 per LPA. Fee remission is available for those receiving certain means-tested benefits.
7. Wait for registration confirmation — the OPG's current processing target is up to 20 weeks. The LPA cannot be used until the registered copy is returned.

"We would always encourage families to speak to a solicitor who specialises in later life planning when setting up an LPA, particularly where the donor's financial affairs are complex or where there is more than one potential attorney. Getting the document right first time avoids delays and the risk of having to re-apply." — Ashberry Healthcare

Frequently Asked Questions

Can an attorney be paid for managing care home finances?A lay attorney — such as a family member — is generally expected to act without payment unless the LPA document specifically grants charging rights. Professional attorneys, such as solicitors, may charge for their time. All decisions about payment must be documented and reasonable.

Can I have more than one attorney?Yes. The LPA allows you to appoint multiple attorneys, either to act jointly (all must agree on every decision) or jointly and severally (each can act independently). For managing day-to-day finances such as care fees, joint and several authority is often more practical.

What if my attorney is also a beneficiary of my estate?An attorney who stands to inherit from the donor can still act legally, but they must be especially careful to document decisions thoroughly and avoid any action that could be construed as benefiting themselves at the donor's expense.

Can a care home refuse to deal with an attorney?A care home cannot refuse to deal with a registered LPA. Once you present a certified copy of the registered document, the home is legally required to recognise the attorney's authority.

What if the donor recovers capacity?An LPA does not end if the donor regains capacity. The donor can continue making their own decisions, and the attorney's role becomes dormant until needed again. The LPA remains registered and available for future use.

Planning Ahead: The Practical Takeaway

Power of Attorney is not a crisis document — it is a planning tool. The families who navigate care home funding most smoothly are almost always those who had the financial LPA in place and registered before it was needed.

If you are supporting a loved one through the transition into care, or planning ahead for yourself, our team at Ashberry is happy to talk through the practical aspects of how funding and legal arrangements work together. We work with families at every stage of this process and can point you toward the right specialist support.

Get in touch with the Ashberry team or explore our guide to paying for care home fees to understand the full funding picture.

LPA registration fees and Office of the Public Guardian processing times are correct as of March 2026. Always verify current figures at gov.uk/power-of-attorney. This article does not constitute legal advice. Independent legal guidance from a solicitor specialising in later life planning is recommended for complex financial arrangements.