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POWERS OF ATTORNEY

 

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Powers of Attorney

INTRODUCTION

What do you do if you want someone to help look after your affairs? What if you become unable to look after yourself or make decisions about your own affairs? Who can make decisions about your welfare and who can deal with your property, operate your bank accounts, pay your bills? Who would you want taking care of you and your affairs if you are no longer able to?

A power of attorney gives someone (the attorney) the authority to act legally on your behalf to the extent specified in the power of attorney.

There are two main powers of attorney – an ordinary power of attorney and an enduring power of attorney.


WHAT IS AN ORDINARY POWER OF ATTORNEY?

 

With an ordinary power of attorney, you appoint someone to help look after your affairs.  The person could be a family member, friend, lawyer, other adviser or a trustee company.  It does not prevent you continuing to look after your own affairs but simply allows the person you appoint to do so as well.

You can choose how wide the powers of attorney you grant should be.  For instance, it could be a general power to look after all your money or property or it could be more specific – perhaps appointing someone to manage your bank account and letting out your house while you are overseas. You can choose more than one attorney. If you do, you need to say whether they must act together (jointly) or whether they can act separately (severally).

An ordinary power of attorney remains valid only while you still have legal capacity – it ceases to be valid as soon as you no longer have the mental or physical capacity to instruct the attorney.  If, for instance you have an accident that leaves you with brain damage, the person could no longer act for you under an ordinary power of attorney.

If you want someone to be able to be able to act for you when you can no longer manage your own affairs, then, while you are still capable, you need to arrange an enduring power of attorney (see enduring power of attorney). An ordinary power of attorney cannot be converted into an enduring power of attorney and may be replaced by one only while you are still mental capable.

Apart from certain statutory exceptions, an ordinary power of attorney also ceases immediately the person who granted it dies.  In that event, the power to deal with property, bank accounts, etc. passes to the executor named in the will or the person appointed to administer the estate if there is no will.

To grant an ordinary power of attorney, you need to complete a form (available from our offices). It needs to state the extent of the powers that you (as donor) are granting, and you and the attorney need to sign the form and have your signatures witnessed by someone other than your prospective attorney.  You can grant the power for a limited time or leave it open-ended.

You can revoke, amend or extend the power at any time .This should be done in writing with the document properly signed and witnessed.  Also, people who have been relying on its authority (the attorney, banks etc.) need to be informed as they are entitled to continue acting on it until they have been advised.  Signing a new power of attorney does not automatically revoke a previous one unless stated.

Remember that giving someone the ability to deal with your property is to give them an important power, so you should think carefully about to whom you wish to give this power and how much power to give them.  They are not required to consult you and you are bound by decisions they make on your behalf, so choosing someone you can trust is critical.  You may wish to seek legal advice about the effect of granting an ordinary power of attorney.


WHAT IS AN ENDURING POWER OF ATTORNEY?

 

Unlike an ordinary power of attorney, an enduring power of attorney (“EPOA”) allows the attorney to act for you if you become mentally incapable.

However you must arrange an EPOA before you become mentally incapable, otherwise the power will be invalid.  If you are already incapacitated, you are deemed not capable of granting a valid power of attorney.  For a definition  of “mentally incapable” see Section 94 of the Protection of Personal and Property Rights Act 1988 (the PPPR Act).

If you are already incapacitated, those who want to care for you and make legal decisions for you would need to apply for court orders under the PPPR Act. This takes longer and is more expensive than setting up an EPOA, and the person appointment may be someone you would not have chosen.

There are two types of EPOA.  One gives the attorney the right to manage your financial affairs and deal with your property.  The other gives the attorney the right to make legal decisions about your personal care and welfare.  It is recommended that you arrange both.

These can be given to the same person or to different people, but even if you give them both to the same persona, you need to grant each power specifically and separately, though this can be done in the same document.

In both cases you can authorise the attorney to act in respect of all of your affairs or only some of them, in which case you must specify which ones.   You can also set conditions and restrictions about how your property should be dealt with or what you would like to happen to you.  It is you as donor and not the prospective attorney who has the right to decide just what the powers should encompass.

If you want steps to be taken to determine that you are no longer able to manage your own affairs, write these into your instructions.

Remember that creating an EPOA gives considerable power over your property, affairs and welfare.  You should seek legal advice about the implications of this and you should make sure that the person you choose as attorney is someone you can trust to act in your best interests as, at some stage, you may be relying on them absolutely.  It is sensible to choose your own lawyer to talk to – do not feel that you have to go to your prospective attorney’s lawyer.


A PROPERTY EPOA

 

Property includes not only land and houses but also businesses, bank accounts, shares and all other possessions, i.e. everything you own. You can choose more than one attorney to exercise an EPOA for your property, and should probably choose to do so as this is a highly responsible and powerful role.

A PERSONAL CARE AND WELFARE EPOA

An EPOA for your personal care and welfare enables your attorney to make legal decisions about your personal care in the event of mental capacity.  For instance, your attorney can decide if you need to go into care, what home or hospital you will go to, what sort of medical treatment you should have, and so on. The attorney cannot make decisions relating to marriage or adoption of children, refuse medical treatment intended to save your life or prevent serious damage to your health, or consent to certain medical treatment (some brain surgery, medical experiments or electroconvulsive treatment).

You can only appoint one person to act as your attorney in relation to personal care and welfare at any time, but you can nominate a substitute to act if the first person is no longer able to.


WHO SHOULD SET UP AN EPOA, AND WHEN?

 

Everyone – young and old – should establish an EPOA for both their property and their welfare. And, as you need to do it while you are still mentally capable, you should do it NOW.

Like a will, an EPOA can be revoked, replaced or varied by you at any time before you become mentally incapable.  This should be done in writing and be properly signed and witnessed, and people who have been relying on the EPOA authority need to be notified.

WHO SHOULD YOU APPOINT?

You can appoint any individual as an attorney provided he or she is over 20 years of age, is not a bankrupt and is not mentally incapable.

HOW LONG DOES AN EPOA HAVE EFFECT?

An EPOA ceases to have effect when:

  • The donor, while still mentally capable, revokes the power;
  • The attorney gives notice in writing to either the donor (if still mentally capable) that he or she no longer wishes to act as an attorney;
  • The donor dies;
  • The attorney (or joint attorney) dies, becomes a bankrupt, becomes mentally incapable or otherwise incapable of acting as attorney; or
  • The Court revokes the power.

 

 
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