A ‘Power of Attorney’ is a legal document which grants a person the power to act on behalf of another person in regard to their property and financial affairs. A person may decide to line up a power of attorney for peace of mind that their estate will be managed in a satisfactory manner should they subsequently become unable to make their own arrangements.
There are two common types of Power of Attorney agreements in England and Wales:
- Ordinary Power of Attorney
- Lasting Power of Attorney
Ordinary Power of Attorney
An Ordinary Power of Attorney (also known as a General Power of Attorney) grants a person the authority to act on behalf of another for a specific period of time. For example, an Ordinary Power of Attorney may be set up if a person is spending a long spell abroad or is temporarily unable to manage their own affairs. An Ordinary Power of Attorney becomes invalid after the specified period of time or immediately upon the request of the donor (the person who has granted authority over their matters to another).
Lasting Power of Attorney
A Lasting Power of Attorney is significantly different to an Ordinary Power of Attorney. If a donor grants Lasting Power of Attorney to a person then that person (the attorney) is permitted to make decisions on the behalf in the case that they subsequently lose the mental ability to do so. This document is most often used to grant authority of affairs to a family member on behalf of an elderly relative, especially if they are diagnosed with dementia.
There are two different types of Lasting Power of Attorney documents:
- Property and Affairs Lasting Power of Attorney
This document grants permission for the chosen attorney to make decisions about how the donor’s money is spent and how the donor’s property is managed.
- Personal Welfare Lasting Power of Attorney
This document grants permission for the chosen attorney to make decisions relating to the donor’s healthcare and welfare. This includes the authority to accept or refuse consent to treatment
Your Rights: The Principles Behind a Lasting Power of Attorney
A Lasting Power of Attorney is not valid until the point that the donor accepts or is medically proven to be in a state of mental incapacity.
The Mental Capacity Act of 2005 is based on the following key principles:
- Every adult has the right to make their own decisions
- Every individual has the capacity to make their own decisions unless it can be proved otherwise
- Individuals have a right to be supported to make their own decisions
- Individuals retain the right to make what may be considered eccentric or unwise decisions
- Any decisions made on behalf of an individual without capacity must be in their best interests
- Any decisions made on behalf of an individual without capacity must be the least restrictive to their rights and freedoms.
What Happens if a Lasting Power of Attorney isn’t set up?
If you have not drawn up a Lasting Power of Attorney and you do lose your mental capacity, an application must be made to the Court of Protection for someone else to gain authority to act on your behalf. This process is often time consuming and expensive. It also means that you will not be able to make the decision about who will look after your affairs as the Court of Protection will decide.
Can I Draw up a Power of Attorney?
You can grant a Power of Attorney if you over the age of 18 and have mental capacity. Only the person granting the Power of Attorney can make the decision to do so. If a solicitor is instructed to draft the document on behalf of the donor then they should only accept instructions from the person granting the power and not from the proposed attorney.
You are also eligible to grant a Power of Attorney if you have been diagnosed with dementia but are able to show that you understand the effects of what you are signing.
A donor can grant more than one person power to act on their behalf and this is known as Joint Attorneys. In this case, the attorneys must always act together. The advantage of Joint Attorneys is that fraud or improper acts by one of the attorneys is less likely. The disadvantage is that if one of the Joint Attorneys dies or becomes mentally incapable then the whole Power of Attorney agreement becomes invalid.
If the attorneys are appointed as both joint and several attorneys, they may either act to make decisions together or individually. This also means that if one of the attorneys dies or loses mental capacity then the Power of Attorney remains valid and the remaining attorneys are still able to act on behalf of the donor.
Why Use a Power of Attorney Solicitor?
An experienced Power of Attorney solicitor can help you draft the terms of your document and legalise its effects. By instructing a solicitor to help you manage the process, you can be assured that the document you draw up is correct to your intentions and valid for the time period you propose. For more information about using a Power of Attorney solicitor head to: www.martynprowel.co.uk/power-of-attorney/.