Powers of Attorney (PoA) are often used to delegate one’s authority (usually concerning financial matters) to a third party. For example, a PoA may be required where an individual is going abroad, or is unable to act for some other reason and wishes someone else to have the authority to act on their behalf. Elderly clients may also wish to delegate financial or welfare authority to a family member, so as to assist them with managing their affairs.
Lasting Powers of Attorney
The most common form of PoA is the Lasting Power of Attorney (LPA), which is registered with the Office of the Public Guardian (OPG) and for use in the UK. There are two types of LPA:
- Property and Affairs LPA. This gives your attorney(s) authority to deal with your property and financial affairs which include paying bills, collecting income/benefits, operating your bank account, selling property on your behalf etc.
- Health and Welfare LPA. This relates to “welfare” decisions such as medical treatment decisions and housing and social service issues.
Ordinary Powers of Attorney
Where an individual wishes to authorise another to deal with property abroad or act on behalf of the donor in some other matter, an ordinary PoA is required. With an ordinary PoA, the authority of the attorney lasts as long as the donor retains capacity. It cannot be used if the donor then loses capacity, unlike an LPA.
Enduring Powers of Attorney
LPAs replaced Enduring Powers of Attorney (EPAs) in 2007 and therefore EPAs are no longer in use. The LPA form is more comprehensive and the main difference between the forms is that with an LPA you can now appoint an attorney in connection with your health and welfare decisions, whereas you could not do this with an EPA. If you have a signed EPA which has not yet been registered, please get in touch and we can assist in the registration of the same, or preparation of an LPA to replace it.
Choosing your Attorneys
Your attorneys are the people who will act on your behalf and must act in your best interests at all times. Your attorney should be someone you trust and competent to carry out their role. An attorney should be over the age of 18 and should not be bankrupt. You can also appoint an independent professional such as accountant or solicitor to act as your attorney.
Restrictions and Conditions
Your attorney(s) can act immediately in the case of an ordinary PoA (or once registered in the case of an LPA or EPA) and you can include restrictions and conditions on your attorneys limiting their power in certain matters. For example, you may wish to prevent them from selling your property.
The importance of an LPA
If you lose your mental capacity and you have not prepared an LPA, it will be necessary for an application to be made to the Court of Protection for someone (known as a Deputy) to deal with your affairs. Your family do not have an automatic right to access your bank accounts or deal with your financial affairs, or even to decide on the type of care you should receive. This can cause a great deal or financial and emotional stress for your family, if you were to suddenly become ill. A Deputyship application is a very costly and time consuming process and therefore we strongly recommend you put in place an LPA now to avoid such a situation. This is especially relevant where we have an ageing population with increased instances of age related illnesses, such as dementia.