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When do you need a Power of Attorney?

When do you need a Power of Attorney?
11 May 2018

A Power of Attorney is a legal document where one person (the 'grantor' or 'donor') gives another person (the 'attorney') the power to make decisions for them regarding their financial affairs, health management or personal welfare. The document is a legal authorisation for the attorney or attorneys (there can be more than one) to act on behalf of the grantor.

In the UK there are two main types of power attorney: an ordinary (or general) power or attorney and a lasting (or continuing) power of attorney. An ordinary power of attorney grants specific powers to the attorneys and is typically used when the donor is unavailable e.g. living abroad. A lasting power of attorney is quite different and is for use when the grantor has lost the capacity to manage his or her affairs e.g. is suffering from Alzheimer’s or dementia.

Ordinary Power of Attorney

Ordinary power of attorney documents can grant the attorney power to act on behalf of the donor for nearly anything relating to the donor’s financial or property affairs, or for just a specific range of powers such as the ability to operate the donor’s bank account. In either case, an ordinary power of attorney can be easily revoked by the donor using a Deed of Revocation document or by specifying an end date within the power of attorney itself.

Lasting Power of Attorning

A permanent, or lasting power of attorney (LPA) is quite different - it is used to make provisions for the long-term care of someone when, at some point in the future, the person is unable to care for themselves. A donor can create a health and welfare LPA, a property and financial affairs LPA or a single LPA that covers everything.

In Scotland the equivalent permanent powers of attorney instruments are the continuing power of attorney and the welfare power of attorney. They are equivalent to the LPAs used in England and Wales.

Setting up an LPA

Anyone over the age of 18 can set up a lasting power of attorney so long as they have the mental capacity to do so and are able to express their wishes. The LPA has to be completed using statutory forms, registered with the Office of the Public Guardian (OPA), and a fee paid. Once registered, the powers granted in the LPA come into effect once the grantor loses the capacity to act for themself (property and financial affairs LPAs can come into effect immediately).

Revoking an LPA

An LPA can be revoked by the donor at any time while they have mental capacity. Once the donor loses mental capacity the lasting power of attorney will only end in very specific circumstances e.g. the donor dies or the attorney does not act in the donor’s best interests.

So, an ordinary power of attorney is a simple document that gives someone temporary powers to act on a donor’s behalf. A lasting power of attorney grants long-term, permanent powers to act on a donor’s behalf once the donor has lost the capacity to make decisions for themselves.

Office of the Public Guardian

You can find more information about lasting powers of attorney at the Office of the Public Guardian (OPG) website. The process of setting up an LPA is (understandably) more involved compared to setting up an ordinary power or attorney. You do not have to use a solicitor to set up or register a LAP but if the grantor’s mental capacity is in question then the process becomes a little more involved. All the information and the forms you need are available from the OPA. We also offer the forms along with our standard Deed of Revocation. The OPG also have an online service for setting up an LPA.

Setting up an Ordinary Power of Attorney

If you want to set up an ordinary power of attorney then you can either engage the services of a solicitor or do it yourself using a template power of attorney, such as the ones we offer. Setting up an ordinary PoA is straightforward. There is no requirement to register an ordinary power or attorney anywhere, nor is there a legal requirement to involve a solicitor.

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