POWERS OF ATTORNEY – FINANCIAL AND WELFARE
Everyone In Scotland who is aged 16 or over is assumed to have legal capacity i.e. can make their own decisions and look after their own affairs. As one gets older, or sometimes as a result of an accident or illness legal capacity can be lost perhaps temporarily or more likely permanently. This can cause all kinds of practical difficulties and there are various ways in which someone else can look after things for the person who no longer has legal capacity.
One of the most straightforward ways this can be done is for you to anticipate your own possible future incapacity and to grant powers to a person or persons to act for you should incapacity arise in the future.
These powers are granted in a legal document called a “Power of Attorney”. This document states not only who the attorney is but also what powers he, she or they may use.
The person signing the Power of Attorney is called the “granter” and the person appointed is called the “attorney”.
Powers of Attorney come in various forms from a simple authority for someone to do a single act for you e.g. to sign a document for you as you are to be on holiday when it requires signing, to more complex documents that contain powers that continue to operate after the granter has lost legal capacity. This is the type of Power of Attorney that is more likely to be of interest to you.
A Continuing Power of Attorney basically enables your attorney to deal with all of your financial and property matters.
A Welfare Power of Attorney enables your attorney to make decisions for you in relation to non-financial matters such as day to day living issues e.g. where it is appropriate for you to live.
Very often both financial and welfare powers are granted in a single combined Power of Attorney document which not only saves on the cost of registering the document with the Office of the Public Guardian but also, importantly, means that whatever the future holds you will have appointed someone who can deal with matters on your behalf. These documents tend to be widely worded as the attorney’s powers only come from this document itself and you are therefore likely to want it to cover all future eventualities.
For a Power of Attorney to continue to be effective after you lose capacity it must be registered with the Office of the Public Guardian based in Falkirk. The Public Guardian has various powers to oversee how adults with incapacity are dealt with in Scotland.
The continuing financial powers under a Power of Attorney usually come into force and can be used as soon as the document is registered with the Public Guardian. This means they could be used by an attorney if the granter could not do something for themselves for a reason short of permanently losing capacity e.g. if you still retain capacity but perhaps have broken an arm and cannot sign your name. Your attorney should only act in this type of circumstance though with your approval . In contrast, however, Welfare powers can only be used when capacity has been lost and usually the Power of Attorney document will make it clear that whether you have lost capacity will be determined by two doctors.
WHO MAY BE ATTORNEYS?
It may sound obvious, but you need to think very carefully about who you would want to act as your attorney. It must be someone in whom you have complete trust and who will be willing and able to handle the powers granted to them. Granting a Power of Attorney is, however, a bit like taking out house insurance – you hope it will not be needed… but it gives you peace of mind that it is there just in case the worst happens and it is needed!
You can appoint one attorney or more than one. You can have one attorney acting for financial matters and someone else acting for welfare matters. You can have two attorneys acting together or separately, or one person as the first named attorney with another acting as a substitute in case the first named cannot act. There are a number of options and the member of our private client team advising you will discuss your preferences and provide guidance on the option to best suit your situation.
You will need to check that the person you wish to appoint as your attorney is willing to act as they need to sign a form indicating their consent before the Power of Attorney can be registered. Someone who is bankrupt cannot act as your continuing attorney. If you later change your mind you are always free to revoke the powers you have granted. Attorneys can also resign from acting although this rarely happens in practice.
DUTIES AND REGULATION
The powers that an attorney has are set out in the Power of Attorney document itself but your attorney will require to exercise these powers taking into account five key principles that are set out in legislation.
- Act only for the benefit of the person who granted the Power of Attorneyr.
- Use the minimum intervention possible in their affairs.
- Take account of their last known wishes.
- Consult with relevant other parties e.g. carers or close relatives.
- Encourage them to exercise their skills – for example in contributing to decisions to be made.
Attorneys should always act prudently and it is strongly recommended that they should keep relevant records including financial records and receipts etc for money spent. In addition to the five general principles there is also a very detailed Code of Practice which is available from the Public Guardian’s website and which should be referred to if your attorney has any doubts as to the way in which they should act. A sensible attorney however, who has your best interests at heart, is unlikely to encounter any problems and will likely operate the Power of Attorney with no difficulty. In the unlikely event that your attorney does act improperly the Public Guardian, Local Authority, Mental Welfare Commission and the Police all have varying powers to investigate.
The attorney will need to show a certified copy of the Power of Attorney document to the institutions that he or she is dealing with. The member of our Private client team who you deal with will register your Power of Attorney using a relatively new electronic system (EPOAR). This costs no more than the traditional registration method but will mean that we can complete all matters for you in a matter of just a few days whereas the old registration process was typically taking almost three months to complete. If you wish, we will keep a copy of your registered Power of Attorney for you free on charge in our strongroom.
As mentioned previously, granting a Power of Attorney is a bit like taking out an insurance policy to safeguard against something bad happening. If incapacity does strike and you have not granted a Power of Attorney your family face a distressing, time consuming and expensive process to get the necessary powers to act for you. They will probably have to apply to the local Sheriff Court to become a “Guardian” or “Intervenor. The process will likely take several months to complete during which time no one has power to administer your affairs e.g. get money from a bank account in your name. The stress involved in all of this will be very unwelcome at a time when the family are likely to be having difficulty coping due to your sudden incapacity. Many people think spouses automatically have powers to act for each other if one loses capacity. This is not the case.
By signing a Power of Attorney any uncertainty is removed and the attorney can start acting immediately after you lose capacity. In the same way as making a Will means you can choose exactly who deals with matters on your death, by granting a Power of Attorney you can choose exactly who deals with matters during your lifetime if you yourself are unable to do so.