Case Study
Do I need a Power of Attorney?
Thursday 19th June 2008
With average life expectancy increasing all the time, more of us are thinking about planning for the future to ensure that our affairs are in order. Part of this planning can include the grant of a Power of Attorney, a deed authorising someone else to act on your behalf in relation to both your financial and welfare affairs. This person is known as your "attorney".
Overview
New style "Continuing and Welfare" Powers of Attorney were introduced in Scotland in 2000 and provided a much needed change to the old style Power of Attorneys, which ceased to be effective when the granter lost capacity to act - exactly the time the Power of Attorney was needed. Under the new regime, Powers of Attorney are "continuing" in the sense that they can only be granted by a person who has legal capacity, but continue in force even when that person loses capacity. It is essential that a person granting a Power of Attorney has capacity at the time the deed is granted - this means that you must be capable of understanding your actions and expressing your wishes. A solicitor/medical practitioner will require to sign a certificate attached to the Power of Attorney deed, confirming that they have met with the granter and that, in their opinion, the person has full legal capacity to grant the deed. No one, not even close family members/spouses, can grant a Power of Attorney on another person's behalf.
An attorney only has power to act under a Power of Attorney deed once this has been registered with the Office of Public Guardian. Generally speaking, people tend to grant a Power of Attorney with no expectation that the deed will be required in the immediate future - the signed Power of Attorney can simply be stored in a safe place (e.g. solicitors' office) until such time as it is required (e.g. when the granter feels they are no longer able/interested in dealing with their own affairs). At this stage, the Power of Attorney deed can be registered and the attorney will be able to act on the granter's behalf (subject to the regulation of the Office of the Public Guardian).
What is the effect of a Power of Attorney?
A Power of Attorney allows your attorney to deal with your affairs as you would have been able to, were it not for your incapacity/fact you had delegated responsibility for these matters to your attorney. The new style Powers of Attorney allow you to appoint a continuing and welfare attorney. Usually this will be the same person (or persons - joint attorneys may be appointed), but it is possible to have separate people acting as your continuing attorney and welfare attorney.
Continuing attorneys will deal with your financial and property affairs. This includes paying bills, dealing with bank accounts and buying/selling property (including houses). Welfare attorneys deal with more personal matters relating to your general welfare. This can include decisions regarding social activities, dress and nursing care. At T C Young, we encourage clients and their prospective attorneys to fill out a questionnaire together, covering common issues for welfare attorneys. This allows peace of mind for the granter that the attorney is aware of their wishes, and in turn for the attorney that they are acting in accordance with the granter's wishes so far as possible.
It is important to note that an attorney cannot do anything not listed in the Power of Attorney deed itself. In particular, they cannot make a Will on the granter's behalf.
What happens if I don't have a Power of Attorney in place?
If you lose capacity before having granted a Power of Attorney, the only option available to close relatives/spouses/friends wishing to act on your behalf in dealing with bank accounts/bills etc, is to apply to the court for Financial and/or Welfare Guardianship. This is a complex and often lengthy process, and requires an application to the court, supported by independent medical evidence confirming that the adult concerned lacks sufficient capacity. The Guardian is also subject to more stringent supervision by the Office of the Public Guardian, and lengthy financial returns require to be made.
It is therefore far simpler for all concerned if a Power of Attorney is put in place long before it is likely to be needed. It is a common misconception that it is only the elderly who have to think about granting Powers of Attorney. Deeds can be granted by anyone over the age of 16, and can always be updated to reflect changing circumstances over the years. It is important to remember that whilst a Power of Attorney is in place, it is not effective until it is registered and will only be registered when it is required due to incapacity etc. If in doubt, a solicitor will seek medical opinion on whether there is a lack of capacity before arranging for the deed to be registered with the Office of the Public Guardian.
The above gives only a brief summary of why it is important to think about granting a Power of Attorney. Please contact our Private Client Department should you wish further information - our staff are more than happy to assist should you wish to grant a Power of Attorney or review the provisions of an existing Power of Attorney.
- Isabel Ewing (Partner) E-mail: iee@tcyoung.co.uk Direct Dial Telephone: 0141 225 2563
- Lesley Hurst (Partner) E-mail: lah@tcyoung.co.uk Direct Dial Telephone: 0141 225 2579