Power of Attorney & Equity Release Guide
Can You Get Equity Release with Power of Attorney?
Yes, equity release may be possible when somebody is acting under a Power of Attorney. However, the process can involve additional legal and lender checks, particularly if the homeowner has lost mental capacity. Read below how My Later Life may be able to help.
The key issues are the type of Power of Attorney in place, whether it has been registered, the homeowner’s mental capacity, how the attorneys are appointed and whether the proposed borrowing is in the homeowner’s interests.
Can You Get Equity Release with Power of Attorney?
Potentially, yes.
A properly registered Property and Financial Affairs Lasting Power of Attorney can allow an attorney to deal with financial and property matters on behalf of the person who created it, known as the donor.
That does not mean an attorney can automatically take out a lifetime mortgage. The lender, adviser and solicitor will normally want to understand:
- Which type of Power of Attorney is in place
- Whether it has been registered correctly
- Whether the homeowner still has mental capacity
- Whether one or several attorneys are appointed
- Whether the attorneys act jointly or jointly and severally
- Why the money is needed
- How the proposed borrowing benefits the homeowner
- Whether there are restrictions written into the legal document
Holding Power of Attorney gives someone legal authority to make certain decisions for another person. It does not make the attorney the owner of the homeowner’s property or money.
Power of Attorney and Equity Release at a Glance
| Situation | Could equity release be possible? | What may be needed? |
|---|---|---|
| Registered Property & Financial Affairs LPA | Potentially, yes | Legal verification, lender checks and evidence of the purpose of the release |
| Donor still has mental capacity | Potentially | The donor should remain involved where they are able to make the decision |
| Donor has lost mental capacity | Potentially | Correct legal authority and evidence that the transaction is in the donor’s interests |
| Health & Welfare LPA only | Normally insufficient on its own | Appropriate authority for property and financial affairs |
| Valid old Enduring Power of Attorney | Potentially | The lender and solicitor will need to check validity, registration and powers |
| No LPA, homeowner still has capacity | Potentially | The homeowner may be able to create an LPA and make their own financial decision |
| No LPA, homeowner lacks capacity | More complex | Court of Protection deputyship or other court authority may be required |
This is general guidance only. Individual lender criteria, legal authority and circumstances can vary.
What Is a Power of Attorney?
A Power of Attorney allows another person to make certain decisions on somebody else’s behalf.
The person who creates a Lasting Power of Attorney is known as the donor. The person appointed to act is known as the attorney.
For an equity release application, the most relevant type is usually a Property and Financial Affairs Lasting Power of Attorney.
GOV.UK explains that this type of LPA can cover decisions involving money, tax, bills, bank accounts, property, investments, pensions and benefits.
Read the GOV.UK guidance on Property and Financial Affairs LPAs.
Which Type of LPA Is Needed for Equity Release?
Property & Financial Affairs LPA
This is normally the relevant LPA for equity release because it can cover decisions involving property, money, banking, investments and other financial matters.
Health & Welfare LPA
This relates to decisions such as medical treatment, care and living arrangements. On its own, it would not normally give an attorney authority to enter into a lifetime mortgage.
Does the LPA Have to Be Registered?
Yes. A Lasting Power of Attorney must be registered before an attorney can use it.
The lender or solicitor may ask for the original registered LPA or acceptable evidence of it, a certified copy where appropriate, identification for each attorney, proof of address, details showing how the attorneys are appointed and any restrictions or instructions contained within the LPA.
See GOV.UK guidance for Property and Financial Affairs attorneys.
Can an Attorney Arrange Equity Release While the Homeowner Still Has Mental Capacity?
Potentially, but the attorney should not automatically take over the decision.
If the homeowner can understand the lifetime mortgage and make the decision themselves, they should generally remain involved.
A Property and Financial Affairs LPA can sometimes be used while the donor still has capacity, depending on the terms of the LPA and the donor’s permission.
An attorney should support the donor to make their own decisions where possible. The existence of an LPA does not automatically mean the donor is incapable of deciding for themselves.
What If the Homeowner Has Lost Mental Capacity?
Equity release may still be possible, but the transaction is likely to receive closer legal and lender scrutiny.
Mental capacity is decision-specific. A person may be capable of making some everyday decisions but not understand a complex financial contract such as a lifetime mortgage.
If the donor cannot make the lifetime mortgage decision themselves, the attorney must act within the authority given by the LPA, any restrictions written into the document, the principles of the Mental Capacity Act and the donor’s best interests.
The adviser, lender or solicitor may request further evidence where there is uncertainty about capacity.
Does Dementia Automatically Prevent Equity Release?
No.
A diagnosis of dementia does not automatically mean that someone lacks mental capacity for every decision.
A homeowner in the earlier stages of dementia may still be able to understand what a lifetime mortgage is, how much is being borrowed, how interest can accumulate, how the mortgage may affect their estate and what alternatives are available.
Where the person cannot understand the transaction, an appropriately authorised attorney or deputy may need to act instead.
What If There Is No Power of Attorney?
Homeowner still has capacity
They may still be able to create a Property and Financial Affairs LPA and make their own decision about equity release.
Homeowner has lost capacity
They cannot simply create a new LPA. A family member or another person may need to apply to the Court of Protection for authority to manage financial affairs.
Read GOV.UK guidance on making decisions for someone who has lost capacity.
Attorney vs Court-Appointed Deputy
| Role | How they are appointed | When commonly used |
|---|---|---|
| Attorney | Chosen by the donor while the donor has capacity to make the appointment | Acts under the authority contained in the registered LPA |
| Deputy | Appointed by the Court of Protection | May be needed when someone has lost capacity without having made an appropriate LPA |
Can an Old Enduring Power of Attorney Be Used?
Potentially.
Enduring Powers of Attorney were replaced by Lasting Powers of Attorney in 2007, but a valid EPA created before the change can still exist.
The lender and solicitor may need to establish whether the EPA is valid, whether it has been registered where required, whether it gives sufficient authority and whether any restrictions affect the proposed transaction.
An old EPA should therefore be checked before assuming that it can be used for a lifetime mortgage.
What Will an Equity Release Lender Want to See?
The registered LPA, EPA or relevant Court of Protection authority.
ID and address evidence for the attorney or attorneys and the homeowner where required.
Evidence or professional confirmation may be requested where capacity is uncertain.
The lender and solicitor may want to understand how the released funds will be used.
Property value, existing mortgage and normal lender property checks.
Whether attorneys act jointly, jointly and severally or under another arrangement.
Why Does the Purpose of the Money Matter?
An attorney must act for the benefit of the donor rather than treating the donor’s property as their own.
Reasons for considering equity release might include paying for care at home, adapting the property, repaying an existing mortgage, essential repairs, mobility or accessibility improvements, heating or energy-efficiency work, meeting living costs or paying for professional care.
These are very different from an attorney borrowing against the donor’s home primarily to benefit themselves.
Can an Attorney Use Equity Release to Give Money to Family?
This needs particular care.
Holding Power of Attorney does not give somebody unlimited freedom to give away the donor’s assets.
A large proposed gift to the attorney, the attorney’s children, other relatives or friends could create significant best-interest, conflict-of-interest and legal concerns.
An attorney who personally benefits from a proposed lifetime mortgage should obtain specialist legal advice. Additional authority may be needed depending on the circumstances.
What If the Attorney Is Also Going to Receive the Money?
This creates a potential conflict of interest.
For example, imagine Margaret lacks capacity and her son Peter is her attorney. Peter proposes releasing £100,000 from Margaret’s home and giving most of it to himself.
Even if Peter believes Margaret would have wanted to help him, the transaction raises important questions about whether Margaret benefits, whether Peter is acting within his legal authority, whether the proposed gift is permitted, whether additional court authority is needed and whether the lender and solicitor can accept the transaction.
A Power of Attorney is a legal responsibility, not ownership of the donor’s assets.
Can Equity Release Be Used to Pay for Care at Home?
Potentially, yes.
Regular domiciliary or private care at home.
Ramps, wider doors, stairlifts or accessible bathrooms.
Work needed to keep the homeowner safely in the property.
Equipment designed to support independent living.
The attorney and adviser should still consider whether equity release is the most suitable way of meeting those costs.
Can Equity Release Be Used to Pay Care-Home Fees?
Potentially, but the circumstances are important.
Most standard lifetime mortgages are designed around the property remaining the borrower’s main residence.
If the homeowner has already moved permanently into residential care, a new standard lifetime mortgage may not be appropriate or available. If the homeowner remains in the property and requires care at home, the position may be different.
The timing of the application therefore matters.
What If There Are Two or More Attorneys?
The wording of the LPA determines how attorneys must make decisions.
Jointly and severally
The attorneys may be able to make decisions separately or together, subject to the terms of the LPA.
Jointly
The attorneys must normally agree and act together for the relevant decision.
See GOV.UK guidance on appointing attorneys jointly or jointly and severally.
What If One Attorney Disagrees?
It depends on how the attorneys were appointed.
If they must act jointly, the transaction may not be able to proceed unless all the relevant attorneys agree.
If they can act jointly and severally, the legal position may be different. However, disagreement over a major transaction such as borrowing against someone’s home can be a strong reason to obtain specialist legal advice before proceeding.
Can an Attorney Sell the Home Instead of Taking Equity Release?
Potentially, if the attorney has the necessary authority and the decision is in the donor’s interests.
This is why selling or downsizing should often be compared with taking out a lifetime mortgage.
| Option | What to consider |
|---|---|
| Lifetime mortgage | Interest, estate impact, property suitability and long-term needs |
| Downsizing | Moving costs, suitability of a new property and whether the donor wants to move |
| Using savings | Remaining emergency reserves and future care needs |
| Another later-life mortgage | Affordability, monthly payments and lender eligibility |
Illustrative Example: Adapting the Home
Jean is 81 and lives in a property worth approximately £425,000.
Her daughter Sarah holds a registered Property and Financial Affairs LPA. Jean has developed mobility difficulties and needs a downstairs bathroom, access ramps, wider doorways and private care several days a week.
The estimated cost is around £45,000.
Jean is no longer able to understand a complex lifetime mortgage contract fully. Sarah therefore speaks to an adviser and solicitor.
Before equity release is considered, they review Jean’s current and future needs, available savings, benefits and other support, whether moving would be more suitable, the effect of a lifetime mortgage on Jean’s estate and which lenders may consider the LPA arrangement.
This example is illustrative and does not describe an identifiable My Later Life customer.
Illustrative Example: A Proposed Gift to the Attorney
Robert is 86 and lacks mental capacity.
His son holds a Property and Financial Affairs LPA and wants to release £120,000 from Robert’s home, with £100,000 intended to help the son buy his own property.
This is very different from releasing money to pay for Robert’s care or property needs.
The proposed transaction could raise questions about whether Robert benefits, whether the attorney has a conflict of interest, whether the gifting powers are sufficient, whether Court of Protection authority is required and whether a lender can accept the application.
The correct outcome may be not to proceed without additional legal authority.
This example is illustrative only and is not legal or financial advice.
How Does the Application Process Work?
Review the LPA, EPA or Court of Protection order.
Establish whether the homeowner can make the lifetime mortgage decision themselves.
The adviser needs a clear explanation of the purpose of the proposed release.
Equity release should be compared with other realistic options.
Different providers can apply different requirements to attorney cases.
The lender reviews the property, application and legal documentation.
The solicitor verifies the authority and advises on the transaction.
If approved, the funds are released according to the legal and lender arrangements.
Can a Power of Attorney Case Take Longer?
Yes, it can.
Potential delays include obtaining certified copies of the LPA, confirming registration, assessing mental capacity, contacting multiple attorneys, obtaining medical or professional evidence, clarifying how the money will be used, resolving solicitor queries, dealing with restrictions in the LPA and obtaining Court of Protection authority where necessary.
Having the correct documentation available at the beginning can reduce avoidable delays.
Documents It May Help to Prepare
Original or accepted certified documentation.
Identification and proof of address for each relevant attorney.
Details of any existing mortgage or secured borrowing.
Property details and any information relevant to lender eligibility.
Quotes or estimates for care, adaptations or essential work where relevant.
Medical, professional or Court of Protection documents if required.
Can an Attorney Access an Existing Equity Release Drawdown Facility?
Possibly, but this should be checked with the lifetime mortgage provider.
If a homeowner already has a drawdown lifetime mortgage and later loses capacity, the provider may need to verify the attorney’s authority before discussing or permitting further withdrawals.
An unused drawdown reserve should not be treated as automatically available.
What Happens If the Homeowner Dies During the Application?
A Power of Attorney ends when the donor dies.
The attorney can no longer continue acting under the LPA after death. Responsibility for the estate then passes to the executors or administrators.
An equity release application that has not completed would therefore need to be reconsidered in light of the death and would not simply continue under the attorney’s authority.
Does Power of Attorney Affect How Much Equity Can Be Released?
The existence of an LPA does not necessarily change the maximum loan-to-value by itself.
The maximum amount is more likely to depend on the homeowner’s age, property value, property type, existing mortgage balance, amount required, lender criteria and health or lifestyle information where enhanced terms are available.
However, the legal circumstances may affect which lenders are willing to consider the case, which can indirectly affect the options available.
How My Later Life Can Help
Power of Attorney cases can require more than simply finding the lender offering the largest lifetime mortgage.
At My Later Life, we can take time to understand who owns the property, who holds the Power of Attorney, which type of LPA or EPA is in place, whether it has been registered, whether the homeowner has mental capacity, why the money is needed, whether several attorneys are involved, the property value and mortgage balance and what alternatives have been considered.
We can then search across suitable equity release lenders and plans available through our service.
Our aim is to identify not only a provider whose criteria fit the legal circumstances, but also a competitive plan with appropriate features.
Depending on the situation, we can compare interest rates, fees, voluntary repayment options, drawdown facilities, early repayment charges, moving-home provisions, inheritance protection and additional borrowing rules.
Where equity release is not suitable, relevant alternatives should also be considered.
Equity Release with Power of Attorney FAQs
Can you get equity release with Power of Attorney?
Potentially, yes. A registered Property and Financial Affairs LPA may allow an attorney to deal with property and financial matters on the donor’s behalf, subject to the LPA terms, legal checks and lender requirements.
Can I arrange equity release for my mother or father?
Potentially, if you have the correct legal authority. Being their son or daughter does not by itself give you authority to mortgage their property.
Can someone with dementia get equity release?
Potentially. A dementia diagnosis does not automatically determine mental capacity. Where the homeowner cannot make the decision themselves, an appropriately authorised attorney or deputy may need to act.
Can a Health and Welfare LPA be used for equity release?
Normally not on its own. Equity release involves property and financial decisions, so appropriate Property and Financial Affairs authority is generally required.
Does an LPA have to be registered?
Yes. An LPA must be registered before an attorney can use it.
Can two attorneys arrange equity release?
Potentially. Whether both must agree and sign depends on whether they were appointed jointly or jointly and severally and on any restrictions in the LPA.
Can an attorney gift the equity release money to themselves?
This can create serious conflict-of-interest and best-interest concerns. Specialist legal advice may be required, and additional authority may be necessary.
Can equity release pay for care at home?
Potentially, subject to the homeowner’s circumstances, lender criteria, legal authority and consideration of alternative funding options.
Can an attorney access an existing drawdown reserve?
Possibly, but the lifetime mortgage provider should confirm the attorney’s authority and whether the reserve remains available.
What happens if there is no LPA and the homeowner lacks capacity?
A Court of Protection deputyship or other court authority may be needed before someone can make relevant financial decisions on the homeowner’s behalf.
Does Power of Attorney end when someone dies?
Yes. An attorney’s authority under an LPA ends when the donor dies. The estate is then dealt with by the executors or administrators.
Need Help with an Equity Release Power of Attorney Case?
Speak to My Later Life about the Power of Attorney, the homeowner’s circumstances, the reason funds are needed and which equity release options may be suitable.
Call 0207 100 4255Explore Your OptionsCan You Get Equity Release with Power of Attorney? The Final Answer
Yes, equity release can sometimes be arranged when somebody is acting under Power of Attorney.
The most straightforward cases are likely to involve a properly registered Property and Financial Affairs LPA, clear legal authority and a proposed transaction that is demonstrably for the homeowner’s benefit.
The process can become more complex where the homeowner has lost mental capacity, no LPA exists, several attorneys disagree, Court of Protection involvement is required, the attorney personally benefits from the transaction or the proposed borrowing is intended mainly as a large gift.
At My Later Life, we can help families understand the equity release options available and search across suitable lenders and plans available through our service.
The goal should not simply be to release the maximum possible amount. Any lifetime mortgage needs to fit the homeowner’s legal position, financial needs and long-term interests.
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Useful official guidance: This article references information published by GOV.UK about Lasting Powers of Attorney, Property and Financial Affairs attorneys, mental capacity and Court of Protection arrangements.
Important information: Equity release will reduce the value of the homeowner’s estate and may affect entitlement to means-tested benefits.
A lifetime mortgage is a loan secured against the home. Interest may be added to the amount borrowed, meaning the balance can increase through compound interest.
A Power of Attorney is a legal arrangement. Attorneys should seek appropriate legal advice where they are unsure about their powers, conflicts of interest, gifting or Court of Protection requirements.
N.B. “This is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.”
The examples in this article are simplified illustrations. They are not quotations, guarantees, legal advice or personal financial recommendations. Individual lender criteria and legal circumstances can vary.
