Powers of Attorney (A brief summary of the law)

Types of Powers of Attorney

Standard Powers of Attorney are often used by people travelling abroad or otherwise out of contact or who want to hand over the running of their financial or business affairs to a relative or professional advisor. A Standard Power of Attorney cannot be used if the Donor becomes mentally incapable.

Enduring Power of Attorney is a Power of Attorney which can be used to deal with financial or business affairs of the Donor even when the Donor has become mentally incapable.

Why should you make a Power of Attorney?

Generally used when people want to hand over the running of their financial affairs to others if they become ill or frail.

Because Enduring Powers of Attorney remain operative even if you are mentally incapable, people often made them “just in case” something happened to them in the future which made them unable to make decisions for themselves.

If you become mentally incapacitated but have an Enduring Power of Attorney, it avoids an application to Court for someone to be given authority to deal with your money and property.

From October, 2007 you can no longer make an Enduring Power of Attorney and these are replaced by the Lasting Power of Attorney regime.

Any existing Enduring Powers of Attorney are valid and can be used after October 2007.

Lasting Powers of Attorney

Introduced for two main reasons:

  1. Enduring Powers of Attorney are powerful documents. Under an Enduring Power of Attorney it was possible to give an Attorney complete authority to deal with your financial affairs - to sign deeds, cheques and other important documents on your behalf. There was a concern that this power was open to abuse by unscrupulous Attorneys. Lasting Powers of Attorney, therefore have greater safeguards.
  2. An Enduring Power of Attorney only allows you to delegate decision making for financial matters. Under a Lasting Power of Attorney you can also choose to grant Attorneys power to make decisions regarding health and welfare matters.

There are therefore two Lasting Powers of Attorney documents:

  1. A Health and Welfare Lasting Power of Attorney which covers health and welfare matters; and
  2. A Property and Affairs Lasting Power of Attorney which does a similar job to an Enduring Power of Attorney and allow someone to deal with a person’s financial affairs.
How do you make a Power of Attorney?

A solicitor can draw up a Power of Attorney for you. There are prescribed forms for Lasting Powers of Attorney which a solicitor can provide. You can also get these from the Office of the Public Guardian website.

Terminology
  • ‘Power of Attorney’. A document granting one or more people authority to make decisions on behalf of another.
  • 'Donor’ - This is the person who grants the power to another person to make decisions on their behalf.
  • ‘The Attorney’ - This is the person who is appointed by the Donor to make decisions for them.
  • ‘Enduring Power of Attorney’ - A Power of Attorney which grants Attorneys power to deal with the property and financial affairs of the Donor. The special characteristic of an Enduring Power of Attorney is that it will remain valid even if the Donor becomes mentally incapable. You cannot make new Enduring Powers of Attorney after October 2007 but any existing documents remain valid.
  • ‘Lasting Power of Attorney’ Documents introduced from October 2007. Lasting Powers of Attorney can cover property and financial affairs but can also cover health and welfare matters. It is therefore be possible to grant Attorneys power to make decisions regarding issues such as what medical treatment the Donor receives and where they live, as well as authority to deal with property and financial affairs.
  • ‘Registration of Power of Attorney with the Office of the Public Guardian’ - A formal process where the existence of the Power of Attorney is registered with the Office of the Public Guardian . The Donor and other specified people are notified giving everyone a chance to comment or object. There is a registration process for Enduring Powers of Attorney and Lasting Powers of Attorney.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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