Powers of Attorney
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- Who can be an attorney?
- Types of Powers of Attorney
- What happens if there is no Lasting Power of Attorney?
- Managing on an informal basis
Powers of Attorney
There may be a time in your life when, because you are incapable of managing your property or financial affairs, you will need to appoint someone to do this for you. Powers of attorney are documents which you can use to give another person, known as your attorney, the right to manage affairs on your behalf. The person giving the power to the attorney is known as the donor.
Appointing an attorney is a matter for you and it cannot be done by anyone else on your behalf no matter how much they believe you should. Similarly you cannot appoint an attorney for anyone else.
In order to create any type of power of attorney, you must have mental capacity to be able to do so. In other words you must know and understand the legal arrangement you are entering into and understand the consequences of this. If you do not have mental capacity the matter will have to be referred to the Court of Protection .
When appointing an attorney it is important that you appoint someone you can trust, a friend or family member are the most popular choices. You need to have confidence that they will manage your finances and assets in a way that you would wish them to.
Essentially an attorney can be anyone who
- Is over the aged of 18
- Has mental capacity
- Is not subject to a debt relief order
- Is not bankrupt
You can decide to appoint more than one attorney if you feel that is appropriate. In this case they can either be appointed to act jointly or separately. You need to consider which may work best in your circumstances.
Ordinary Power of Attorney
If you want someone to handle your financial affairs for a temporary period, for example while you are on holiday or while you can supervise what they do, you need an ordinary power of attorney. This can be for such things as signing business agreements or conveyancing documents in your absence.
Enduring Power of Attorney
An enduring power of attorney (EPA) is one which was made prior to 1st October 2007 and which is known as an EPA. If you have signed one of these before that date, it remains valid. It is advisable to let others know the document exists. In the event that you lose mental capacity it can still be used but it must be registered at the Court of Protection via the Office of the Public Guardian (OPG). The registration, whilst for your benefit, is compulsory and is necessary to ensure that your attorney administers your assets as required by law.
Lasting Power of Attorney (LPA)
There are two types of LPA, one for property and affairs the other for personal welfare and you may choose to use either or both of these. By doing this you will ensure your financial affairs and personal welfare will be looked after by someone else should this be necessary.
The relevant forms are available online and you will find explanatory booklets to explain the process. There is also an online tool to help with the completion of this form which should be very useful.
It is not possible to use an LPA until it is registered with the Office of the Public Guardian (OPG). This registration process can take a number of weeks (currently 9 weeks) from the time of submission. There is also a fee to pay (currently £110) although there may be a exemption if you are on benefits.
There are occasions when the lack of a LPA can cause/create problems. You may suddenly suffer a loss of mental capacity and no longer be able to make decisions for yourself which may mean you cannot look after your finances. In these circumstances, your assets may be inaccessible until the Court of Protection appoints a deputy to act on your behalf.
What is a deputy?
A deputy is someone who applies to, and is appointed by, the Court of Protection who has the authority of the Court to make decisions on behalf of the person who no longer has capacity. It is usual for a relative or friend to apply in such cases but it can take some time for the appointment to be completed. During this time your financial assets may be unavailable for your use and benefit. To make this application your deputy will need to pay the relevant fee, currently £400.
As a deputy your powers are set out in a deputy order given by the Court. Your powers may include receiving income, any pension, and other income such as dividends. You may also be authorised to receive capital sums such as those from the sale of a house and to spend the money on behalf of the attorney on such things as nursing or care home fees.
It is the responsibility of the Public Guardian to supervise deputies. This means checking that they comply with the terms of the Court order and that the deputy is acting in the best interests of the person lacking capacity.
If you just want someone to help you with a few defined tasks, you may not need a Power of Attorney at all. Here are some examples of arrangements where you can get people to help you without needing a LPA.
If the only power you want to give someone is the power to operate a bank account on your behalf, you should just write to your bank. Many banks have their own form, called a form for third party mandate, which they will ask you to complete and return to them.
Social security benefits
If you are temporarily unable to collect your benefit and it is normally paid into your bank or building society account, you should write to your bank or building society, asking them to give temporary power to someone else to operate your account (see above). If your benefit is normally paid by cheque, you can fill in the back of the cheque to allow someone else to cash it for you. If you want the agent to cash a benefit cheque for you on a regular basis, you should contact the office that deals with your benefits payments to let them know.