Power of Attorney

What Is a Power of Attorney?

A power of attorney is a legal document that gives one or more individuals the authority to act on behalf of the donor in specific matters. These matters can range from managing financial transactions to making healthcare decisions. The extent and duration of the authority granted can vary depending on the type of POA and the donor’s preferences.

Legal Framework

England and Wales’s legal framework for power of attorney is primarily governed by the Mental Capacity Act 2005 and the Powers of Attorney Act 1971. These statutes outline the requirements for creating a valid POA, the duties and responsibilities of attorneys, and the mechanisms for registering and using the POA. The Office of the Public Guardian (OPG) oversees the registration and regulation of POAs.

Key Concepts

• Donor: The person who creates the power of attorney and grants authority to the attorney.
• Attorney: The person appointed by the donor to act on their behalf.
• Mental Capacity: The ability to make decisions for oneself. A person is deemed to have mental capacity if they can understand, retain, and evaluate information to make a decision and communicate that decision.
• The Office of the Public Guardian (OPG): is the regulatory body responsible for overseeing powers of attorney and protecting individuals who lack mental capacity.

Types of Power of Attorney

There are several types of Power of Attorney, each serving different purposes and offering varying levels of authority and duration.

Ordinary Power of Attorney (OPA)

An Ordinary Power of Attorney grants the attorney authority to act on behalf of the donor in financial and property matters. This type of POA is typically used for a specific period or purpose, such as during the donor’s absence or illness. The OPA is only valid when the donor has mental capacity, and it becomes invalid if the donor loses capacity.

Lasting Power of Attorney (LPA)

A Lasting Power of Attorney is a more comprehensive document that remains valid even if the donor loses mental capacity. There are two types of LPA:

1. LPA for Property and Financial Affairs: This type of LPA allows the attorney to make decisions about the donor’s financial matters, including managing bank accounts, paying bills, and buying or selling property.
2. LPA for Health and Welfare: This type of LPA grants the attorney authority to make decisions about the donor’s personal welfare, including medical treatment, living arrangements, and day-to-day care. The LPA for Health and Welfare only comes into effect when the donor loses mental capacity.

Enduring Power of Attorney (EPA)

Enduring Powers of Attorney were replaced by Lasting Powers of Attorney in October 2007. However, EPAs created before this date are still valid. An EPA allows the attorney to manage the donor’s financial affairs and can continue to be used if the donor loses mental capacity, provided it has been registered with the OPG.

Creating a Power of Attorney

Creating a Power of Attorney involves several steps, each requiring careful consideration to ensure the document is valid and aligns with the donor’s wishes.

Choosing an Attorney

Selecting an attorney is a critical decision. The chosen individual should be trustworthy, competent, and willing to act in the donor’s best interests. Donors can appoint multiple attorneys who can act jointly, severally, or jointly on some decisions and severally on others. It is also advisable to appoint a replacement attorney if the primary attorney can no longer act.

Drafting the Document

The POA document must be drafted to reflect the donor’s wishes accurately. It should specify the attorney’s authority’s scope, limitations, and specific instructions or conditions. For LPAs, standard forms provided by the OPG must be used.

Certification of Capacity

For an LPA, a certificate provider must confirm that the donor understands the document and is not under undue influence. The certificate provider can be a professional, such as a solicitor, doctor, or someone who has known the donor for at least two years.

Signing and Witnessing

The POA document must be signed by the donor and witnessed by an independent adult. The attorney(s) must also sign the document to accept their appointment, and their signatures must be witnessed.

Registration

An LPA must be registered with the OPG before it can be used. The registration process involves submitting the completed and signed document to the OPG and the required fee. The OPG will review the document and, if valid, register it and return a certified copy to the donor and attorney.

Case Studies

To illustrate the practical implications of Powers of Attorney, let’s explore a few case studies that highlight common scenarios and their outcomes.

Managing Financial Affairs

Mr. Williams, an elderly gentleman, decided to create a Lasting Power of Attorney (LPA) for Property and Financial Affairs. He appointed his daughter, Sarah, as his attorney. As Mr. Williams’ health declined, Sarah was able to manage his bank accounts, pay his bills, and ensure his financial affairs were in order. This arrangement provided Mr. Williams with peace of mind, knowing his finances were being managed responsibly, and allowed Sarah to support her father effectively.

Health and Welfare Decisions

Mrs. Taylor, who had been diagnosed with early-stage dementia, set up a Lasting Power of Attorney (LPA) for Health and Welfare, naming her husband, John, as her representative. As her condition advanced, John utilised the LPA to make choices regarding her medical care and living arrangements. This guaranteed that Mrs. Taylor received the necessary care based on her wishes and eased the burden on her family.

Overseas Absence

Mr. and Mrs. Brown planned a long trip abroad and gave their son, David, an ordinary power of attorney. This allowed David to manage their finances while they were away. David handled their property transactions, paid bills, and managed investments. The power of attorney was cancelled once Mr. and Mrs. Brown returned, as it had effectively fulfilled its purpose.

Transition from EPA to LPA

Mrs. Green had an Enduring Power of Attorney created before 2007. As she got older, her family decided to update her estate planning documents and create a Lasting Power of Attorney for both property and financial affairs, as well as health and welfare. This ensured that her current wishes were reflected and provided a more comprehensive framework for managing her affairs as her health needs changed.

Strategic Considerations

Successfully creating and managing a Power of Attorney requires strategic planning and expert legal advice. At DLS Solicitors, we work closely with our clients to develop effective strategies that ensure their Powers of Attorney are robust and aligned with their wishes.

Regular Review and Updates

Regularly reviewing and updating a Power of Attorney is crucial to ensure it remains aligned with the donor’s current wishes and circumstances. Significant life events, relationship changes, and health developments should prompt a review of the POA.

Choosing the Right Type of POA

Deciding on the appropriate type of POA—Ordinary, Lasting, or Enduring—is essential. Our solicitors help clients understand the implications of each type and choose the one that best suits their needs.

Clear Instructions and Limitations

Providing clear instructions and limitations in the POA document can help prevent misunderstandings and ensure that the attorney acts according to the donor’s wishes. This includes specifying the scope of authority, conditions, and specific decisions the donor wants to control.

Communication with Attorneys and Family

Open communication with the appointed attorney(s) and family members about the Power of Attorney can help manage expectations and reduce the likelihood of disputes. Informing them about the responsibilities and limitations of the POA ensures everyone understands the donor’s intentions.

Legal Compliance

It is vital to ensure that the creation and use of a Power of Attorney comply with legal requirements. Our solicitors provide expert guidance to ensure all formalities are met, from drafting the document to registering it with the OPG.

Legal Assistance and Guidance

At DLS Solicitors, we offer a range of services to support clients in all aspects of creating and managing Powers of Attorney, including:

Legal Advice and Consultation

Our experienced solicitors provide personalised legal advice on the implications of different types of Powers of Attorney, helping clients understand their options and develop effective strategies.

Drafting and Reviewing Documents

We assist clients in drafting and reviewing power of attorney documents to ensure they are comprehensive, clear, and aligned with their wishes. Our solicitors ensure all legal requirements are met and the documents correctly executed.

Registration with the OPG

Our team handles registration with the Office of the Public Guardian, ensuring that Lasting Powers of Attorney are registered correctly and efficiently. We provide guidance on completing the necessary forms and paying the required fees.

Dispute Resolution

In cases where disputes arise over the use or validity of a Power of Attorney, our solicitors offer robust dispute resolution services. We aim to achieve amicable solutions that protect our clients’ interests and preserve relationships.

Conclusion

A power of attorney is an important legal tool used in estate planning and personal management. It provides a framework for decision-making in situations where the donor may be unable to act independently. By understanding the different types of powers of attorney and engaging in strategic planning, individuals can ensure that their affairs are managed according to their wishes.

At DLS Solicitors, we are dedicated to providing expert guidance and support to our clients, assisting them in navigating the complexities of creating and managing powers of attorney. Whether you are drafting a new POA, updating an existing one, or addressing disputes, our team is here to help you every step of the way, ensuring peace of mind and financial security for you and your loved ones.

Our commitment to clear communication, meticulous planning, and personalised service ensures that your power of attorney reflects your wishes and adapts to life’s changes. You can trust DLS Solicitors to guide you through the intricacies of powers of attorney and all aspects of estate planning, safeguarding your future and protecting your interests.