Powers of Attorney are often overlooked and not many people are aware of what they are or how they work. With legal jargon being thrown all over the place, understanding how a Power of Attorney could benefit you can be challenging.
We have prepared a quick guide to help inform you of the different types of Power of Attorney, how they each work and what you need to consider when setting one up.
What is a Power of Attorney?
A Power of Attorney is the name of a special relationship by which one party known as the ‘Donor’ gives another person known as the ‘Attorney’ or ‘Donee’ power to act on their behalf in their name and manage their affairs. This includes dealing with banks and local authorities or acting with regard to medical treatment.
Why would you need a Power of Attorney?
There is a possibility where you may find yourself in hospital and you are incapable of dealing with everyday tasks such as paying bills, or it could be something more long-term. For example, you have been diagnosed with a life limiting condition where you could lose mental capacity in the future and you require someone to make decisions on your behalf.
What are the different types of Power of Attorney and how do they take effect?
There are three different types of Power of Attorneys, all of which operate slightly differently:
What if you do not have a Power of Attorney in place?
If you are in a situation where you do not have a Power of Attorney and you lose capacity, an application to the Court of Protection will be needed. The Court of Protection will be able to decide whether you have mental capacity to make decisions, make an order relating to your health and welfare and/or property and financial affairs. They will then appoint a deputy to make these decisions on your behalf. A deputy is a similar role to an Attorney and will follow the same rules as an Attorney to ensure that they are making decisions in your best interest.
What do you need to consider when setting up a Power of Attorney?
In order to set up an LPA there are prescribed forms that are required, which can be found on the Government website at Lasting power of attorney forms – GOV.UK (www.gov.uk).
When filling out these forms there are a few things that the Donor will need to consider. Firstly, the Donor will need to think about who they want to appoint as attorney and secondly, how they want them to be appointed. If there is more than one attorney the Donor may wish to choose for them to act jointly, jointly and severally or jointly in respect of some matters and joint and severally on others.
The Donor may also want to consider a replacement attorney and any restrictions or actions that they want to place on their attorney. As part of the process an LPA must include a certificate that has been given by someone who has known the Donor personally for two years, for example a solicitor, GP or a friend. This certificate will clarify that the Donor has full mental capacity before the LPA is validated.
Once the forms have been filled out and signed correctly the next step will be sending the documents to the Office of the Public Guardian along with payment for registration. The registration of an LPA can take from 8-10 weeks. The LPA will then either be returned to you or the solicitor you appointed.
In regards to GPA’s, what the Donor needs to consider are similar to that of an LPA. The Donor will only need to consider who they want to appoint as their attorney and how they want them to be appointed. There is no prescribed form for a GPA but there is a standard form of wording which must be used to make it effective. The wording for a GPA can be found on the Law Society website.
Please visit our Power of Attorney page for further information on the different types of document and a step-by-step guide to setting one up. Our Private Client team can advise and arrange all types of Power of Attorney and are also available to act as professional attorneys, should you require. Please get in touch if you are thinking about setting up a Power of Attorney and would like advice.