October 2007

Powers of Attorney

A Power of Attorney is a legal document whereby one person grants authority to another to act on his behalf. There are different types of Powers of Attorney as follows:

Ordinary Power of Attorney

An Ordinary Power of Attorney is generally given for a certain period of time and used if the person granting the Power (the Donor) is unavailable or, perhaps, is unwilling to manage his own affairs. For example, the Donor may be going on holiday and wishes for someone to manage his affairs while he is away, or will not be around to sign a document at the relevant time.

The authority can be granted in general terms or limited to specific matters. Of course, it is important to ensure that careful consideration is given when deciding whether and to whom a Power of Attorney is to be granted.

The Ordinary Power of Attorney will end at the expiry of the specified period (if there is one) or upon the request of the Donor using a Deed of Revocation served on each Attorney. An Ordinary Power of Attorney will come to an end automatically in the event that the Donor loses mental capacity.

Enduring Powers of Attorney

The authority granted under this type of Power of Attorney applies to dealing with the financial affairs (dealing with bank accounts, buying and selling property, etc) of the Donor and, unless restricted, can be exercised whilst the Donor still has mental capacity. Unlike an Ordinary Power of Attorney, it will also remain valid in the event the Donor loses his mental capacity. Please note, however, that once a Donor becomes mentally incapable, the Attorney named in the Enduring Power of Attorney must register it with the Court of Protection as soon as practicable in order that the authority granted may continue.

The Mental Capacity Act 2005 replaced Enduring Powers of Attorney with Lasting Powers of Attorney from 1 October 2007. Accordingly, from 1 October 2007 it is no longer possible to grant an Enduring Power of Attorney, although those Enduring Powers of Attorney existing but unregistered prior to this date may still be registered in the event the Donor loses mental capacity.

Lasting Powers of Attorney

A Lasting Power of Attorney increases the scope of authority which may be granted by a Donor. In addition to granting authority to deal with the financial affairs of the Donor, it is also possible for the Donor to grant authority to an Attorney to make decisions regarding the Donor’s personal welfare (care, medical treatment, living arrangements, etc). The Donor can specify whether the authority granted should apply to financial matters, personal welfare or both.

There are restrictions and procedures which apply to Lasting Powers of Attorney before they become valid. One of those new procedures relates to the fact that once a Lasting Power of Attorney has been created, it must be registered with the Court regardless of the Donor’s mental capacity. The Donor must also support the registration by confirming that he fully understands the nature and effect of the Lasting Power of Attorney and that the Donor has not been subject to fraud or undue pressure.

The above only represents a brief and general overview of matters relating to Powers of Attorney and accordingly, should you wish to obtain any further advice or assistance in respect of the same, please contact our Probate Department at our Beaconsfield Office.