Powers of attorney - acting on behalf of another

Managing for the future

Every adult has the right to manage his or her own money or affairs. However, our ability to manage our affairs may change in the future due to old age, illness, disability or accident.

Rutherfords Solicitors can help you to plan for the future. This may include the preparation of a new will or giving someone the power to manage your financial affairs when it is difficult for you to manage them yourself.

The legal way of giving someone else the power to manage your affairs is by a power of attorney. However, if mental capacity has been lost, it is not possible to prepare a power of attorney and a deputy will have to be appointed by the court.

The Office of the Public Guardian (`OPG`), previously called The Public Guardianship Office, is responsible for keeping a register of lasting and enduring powers of attorney and supervising deputies.

What is a 'power of attorney'?

A power of attorney is a document by which one person (the “donor”) gives another person (the “attorney”) the power to act on his behalf and in his name. A donor must have the necessary mental capacity to make a power of attorney.

A power of attorney can be general entitling the attorney to do everything the donor can do, or limited to certain specified tasks.

There are different types of power of attorney:

1) Ordinary power of attorney

This can authorise the attorney to manage the donor's property and financial affairs. The power will end if the donor ceases to have mental capacity.

2) Enduring power of attorney

Before 30 September 2007, an enduring power of attorney (“EPA”) authorised the attorney to manage the donor’s property and affairs and would continue even if the donor lost mental capacity.

Although a new EPA can no longer be prepared due to changes in the law, existing EPA`s continue to be valid.

If the donor loses mental capacity, the EPA must be registered with the Office of the Public Guardian.

3) Lasting power of attorney

Lasting powers of attorney (“LPA”) were introduced from 1st October 2007 and can be used in the same way as an enduring power for property and affairs, but can also be used to deal with the donor’s personal welfare.

There are two types of LPA:

Property and affairs LPA - The attorney has authority to deal with property and affairs regardless of mental capacity of the donor.

Personal welfare LPA - The attorney has the power to make welfare and healthcare decisions only when the donor lacks mental capacity. This can include giving or refusing consent to the continuation of life sustaining treatment.

How do I choose an attorney?

The attorneys should be over the age of 18, trustworthy and have the appropriate skills to make decisions about your property and affairs or personal welfare. The attorneys must not be an undischarged or interim bankrupt.

It is advisable to appoint more than one attorney. If more than one is appointed, you can require them to always act together (jointly) or together or separately (jointly and severally). You may even appoint them to act jointly for some things and jointly and severally for others. We can advise you when this would be appropriate.

If your attorneys act jointly, they must be able to sign documents together. This can pose problems if they do not live near each other. If one attorney dies or becomes bankrupt (if a property and affairs LPA) the lasting power can no longer be used.

You may also choose to appoint a replacement attorney, in case one of your original attorneys dies or otherwise cannot act for you. If you appoint your spouse or civil partner then dissolution of the marriage or civil partnership will terminate the appointment unless you have specified otherwise in the LPA.

Guidance for my attorney

Your LPA can include restrictions or conditions confirming when your attorney can act.

Such restrictions will be legally binding and we will therefore consider carefully with you which conditions are appropriate to your particular circumstances.

The LPA can also include guidance to your attorney. With a property and financial affairs LPA this can include how your finances should be dealt with if you lose mental capacity. With a personal welfare LPA this could be to express a preference where you want to live and what, if any, treatments you may prefer not to have if you lose mental capacity.

Should my attorney be paid?

Generally, family and friends appointed as attorney would not expect to be paid. However, out of pocket expenses can be recovered by the attorney.

Professional attorneys, such as a solicitors or accountants, if they are prepared to accept the role, must be paid for their work and provision should be made in the LPA.

Notifying interested persons

You can choose up to 5 people (family and friends) to be notified that the LPA is to be registered with the Office of the Public Guardian.

The interested persons have the right to object and raise concerns on your behalf. This is an important safeguard under the Mental Capacity Act 2005.

When can my attorney act under the LPA?

The attorney will only be able to act when the LPA has been signed by you and your attorney, including any replacement attorney, witnessed and certified by a certificate provider.

The purpose of certifying the LPA is to confirm that you understand the nature and scope of the lasting power and that you have not been unduly pressured into making the power. The LPA has to be certified without the attorney being present.

As solicitors we can act as the certificate provider for you and also witness the LPA. The certificate will also need to confirm there has not been any fraud or another reason why you cannot make the power. If there is any doubt about mental capacity we will advise you to appoint a medically-qualified certificate provider.

Once the LPA is signed, witnessed and certified, it must then be registered with the Office of Public Guardian before it can be used.

The property and financial affairs LPA can be used both when you have capacity to act, as well as if you lack mental capacity to make a financial decision. The personal welfare power can only be used if you lack mental capacity to make a welfare or medical decision.

Court fees

The court fee for registering an LPA is £120.

The legal costs for preparing the LPA will depend upon the work and time involved, the type of LPA required, whether replacement attorneys are appointed, whether we act as certificate provider, and whether we need to make an appointment to see you at home.

We will advise you of the estimated fee at our meeting.

What are the duties of my attorney?

Attorneys have specific duties and responsibilities under the Mental Capacity Act 2005 (“MCA 2005”).

In addition to the general principles set out below, the attorney has the duty to carry out the donor's instructions, not to take advantage of the position of attorney, not to delegate unless authorised to do so, a duty of faith and confidentiality, and to comply with directions of the Court.

For property and financial affairs LPA`s, the attorney must also keep accounts and keep the donor's money and property separate from his own

Guidance

Decision making under an LPA must be in accordance with the principles set out in the MCA 2005.

Section 2 of the MCA 2005 sets out a joint approach where the donor and attorney work together. The donor is assumed to have capacity to make a decision unless if can be established that they lack capacity. The test of capacity is flexible and may vary according to the particular decision to be taken at a particular time. For example, the donor may be able to make decisions about household spending but not about selling his home.

Where it is established that the donor lacks capacity to make a particular decision, Section 4 of the MCA 2005 requires the attorney to act in the donor's “best interests”. The attorney should consider consultation with relatives and carers and others interested in the donor's welfare, and also encourage the donor to participate as fully as possible.

Further guidance can be obtained from the Office of the Public Guardian website www.publicguardian.gov.uk

Rutherfords Solicitors

Our Probate Department will be happy to advise you and prepare:-

Ordinary powers of attorney
Lasting powers of attorney for property and affairs or personal welfare
Registering enduring powers of attorney with the Court
Applications to the Court of Protection to appoint deputies.

If you are unsure whether a power of attorney is needed or is appropriate, or wish to discuss a possible appointment of a deputy, please call for an appointment with Antony Illsley on 01827 301142.

Antony J Illsley LL.B Solicitor and Head of Probate