Choosing someone to take power of attorney which is the legal authority to act for you over your financial affairs is an important decision.
There are a number of different types of Power of Attorney and these are explained below.
Lasting power of attorney
A lasting power of attorney carries on, or ‘lasts’, even after you have become unable to manage your affairs - whether temporarily or permanently, or because of an illness, disability or accident. Lasting powers of attorney have now replaced enduring powers of attorney, although valid enduring powers of attorney made before 1 October 2007 can still be used. No new enduring powers of attorney can be made after 1 October 2007.
For a lasting power of attorney to be valid, you must fully understand the implications of the arrangement at the time of making it. A certificate provider will need to sign a certificate to say that you are aware of the implications and that nobody is pressurising you into making a lasting power of attorney. (A certificate provider is someone who has known you for at least two years, or someone with specialist skills in assessing if a person is incapacitated.) The attorney must be at least 18 years old and must not be bankrupt if appointed to make decisions about a person’s property and money. More than one attorney can be appointed at the same time.
Your attorney cannot start making decisions on your behalf until the lasting power of attorney has been registered by the Office of the Public Guardian, who will make sure your attorney is aware of his or her duty to act in your best interests. The Office of the Public Guardian will charge a fee for registering the lasting power of attorney.
There are two types of lasting powers of attorney:
- Health and welfare lasting power of attorney
- Property and financial affairs lasting power of attorney
Health and welfare lasting power of attorney
A health and welfare lasting power of attorney can be made to give your attorney the right to make personal welfare and medical treatment decisions on your behalf if at some time in the future you are unable to make those decisions yourself. A health and welfare lasting power of attorney can only be used when it has been registered and the donor has lost capacity (the ability to handle their own affairs).
Property and financial affairs lasting power of attorney
A property and financial affairs lasting power of attorney can be made to give your attorney the right to make financial decisions, such as managing your bank account. Once registered, a property and financial affairs lasting power of attorney can be used while the donor still has capacity, unless the lasting power of attorney specifies otherwise.
The Court of Protection
If someone is mentally incapable of making a particular decision at a particular time, and they haven’t made a lasting power of attorney, and the decision isn’t one that can be made on an informal basis, the matter can be referred to the Court of Protection. The court may either choose to make the decision itself on the person’s behalf, or choose someone else, known as a ‘deputy’, to make the decision for them.
Where the court appoints a deputy to manage someone’s property and financial affairs on an ongoing basis, the deputy usually has to keep accounts, enter into a security bond, and report to the Office of the Public Guardian.