05 Jun 2015

Analysis: Powers of Attorney

Analysis: Powers of Attorney

 

Iain Considine, Partner, discusses Powers of Attorney

A recent campaign by Age Scotland has seen the number of Powers of Attorney registered at the Office of the Public Guardian increase by around 18% in Scotland over the past year.  If you are considering granting a Power of Attorney but have yet to do so, what are the benefits to you?

Benefits

Granting a Power of Attorney allows you to place your financial and personal affairs in the hands of a family member, friend or other trusted person.  When you are no longer able to make decisions yourself, due to lack of capacity for example, your Attorney would then step in to take matters on in your best interests.  It can give you piece of mind knowing that your affairs will be dealt with by someone you trust and in the manner you wish.

Power of Attorney or Guardianship Order?

Forward planning is vital when it comes to Powers of Attorney.  They can only be granted by someone who has been deemed to have the full capacity to make such a decision.  When a Power of Attorney has not been granted but is required and the individual no longer has capacity to grant one, an application would require to be made for a Guardianship Order.  The application process is lengthy with actions taking around 6 months from beginning to end while the Courts consider all the facts.  It is advisable, therefore, to grant a Power of Attorney when you have the ability to do so and as such Guardianship Orders should only be used as a last resort to avoid the excess red tape and expense they bring.

Getting your instructions

Should you decide to grant a Power of Attorney, your solicitor will obtain your explicit instructions on questions, such as when the powers are to come into effect, whether the powers are to come into effect at the outset of incapacity and how incapacity is to be determined.  This will ensure that the Power of Attorney is tailored specifically to your instructions and will accurately represent how you wish your affairs to be dealt with.

Continuing or Welfare?

There are two main types of Power of Attorney:-
  • Continuing – this deals with your property and financial affairs
  • Welfare – this type relates to your personal welfare such as your care

You can also grant a Power of Attorney which merges both of the above powers.  Recent case law in the Special Case between Great Stuart Trustees Ltd and the Public Guardian has clarified what exactly is required in a Continuing Power of Attorney to ensure it complies with legislation.  This has made it easier for the profession to draft Powers of Attorney which fully and accurately reflect the client’s instructions so that the powers can easily be exercised by the Attorney.

Conclusion

It is important to note that the powers associated with Powers of Attorney do not automatically pass to family members when you lose capacity.  It is crucial that a Power of Attorney is put in place in plenty of time before they are required to ensure that your instructions are accurately reflected and to avoid the need for a Guardianship Order.  The powers will only become exercisable when certain criteria, to be stipulated within the Power of Attorney, are met.  Therefore, you can keep control of all your own affairs right up until your Attorney has to step in.


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