Powers of Attorney:
What you need to know.
Powers of Attorney are a legal way of appointing someone to manage your affairs if you become physically or mentally disabled from an unexpected illness or accident or because of the onset of old age.
A lot of people are scared of these kinds of Powers, fearing that someone is going to take all of their money away, but at least with Powers of Attorney you can appoint whoever you are comfortable with. (With a Deputyship Order, the decision may not be yours and it could even be Social Services who are responsible for your affairs)
Below are some common kinds of Powers of Attorney. In all the detail below the Donor is the person creating the Power of Attorney, and giving the power to someone else.
General Powers of Attorney (GPOA)
GPOAs can be used to appoint someone for a specified amount of time (up to a year), and can be for general use or for a specific task. GPOAs can only be used whilst the Donor has mental capacity (so for example they couldn't be used if the donor loses mental capacity after having granted the power, but can be used whilst they are out of the country).
GPOAs don't have to be registered anywhere and can be used as soon as they are created.
We would often get asked to do a general power of attorney for someone who is leaving the country for a few months and wants a relative or friend to be able to sell their house for them whilst they are away, or maybe you are having an operation and won't be able to write or talk for a short period of time.
Lasting Powers of Attorney (LPAs)
LPAs came into force on the 1st October 2007 and like a general power can be for general use or for a specific task.The big difference between these and GPOAs is that they can cope with the donor losing their mental capacity (whereas a GPOA becomes useless if the donor loses their mental capacity).
Within LPAs there are actually two different types available. The more common version is for 'Property and Financial Affairs' - i.e. looking after someones money and property. The other type is known as 'Health and Welfare'. These are less common and usually used to give someone power to decide on your health issues - such as types of medical treatment or even the ability to cut off life-sustaining treatment.
Important:- An LPA cannot be used until it is registered with the Office of the Public Guardian. You can register the LPA at any time, before or after someone loses their capacity, but it absolutely cannot be used before it is registered.
This registration process takes around 4 months.
We would often get asked to prepare a Lasting Power of Attorney by someone who is concerned that they may be going to lose their mental capacity in the future and want to prepare for that now by ensuring that their family or friend will be in charge of their affairs when this happens. But people instruct us at all ages, to avoid the possiblity of a Deputyship Order. In fact the head of our Private Client department has had one since he was 26 years old! He swears he has it just in case, but his staff have their own opinions on his mental capacity....
Enduring Powers of Attorney (EPAs) (can no longer be created)
We've put these in here for completeness - they were available until the 1st October 2007, when they were replaced by Lasting Powers of Attorney (see above). We've included them here as EPAs signed by the Donor before that date are still valid, but with some conditions.
EPAs can be used as soon as they are completed, but only whilst the Donor retains their mental capacity.
If a Donor loses their mental capacity, then the Attorneys must stop using the EPA and register it with the Office of the Public Guardian before they can use it again. This registration process takes around 3 months.