16 Dec 2014

Analysis: The benefits of having a Power of Attorney

Analysis: The benefits of having a Power of Attorney

 

Shona Morrison, Partner, discusses the benefits of having a Power of Attorney and explains the different formats available.

Generally, there are four types of Power of Attorney available in Scotland under the Adults with Incapacity (Scotland) Act 2000 (as amended) which could be relevant depending on a person’s circumstances.

A simple Power of Attorney

This continues to be of use where a person is abroad or where an adult cannot manage his or her daily financial affairs. When applied, this power allows for an authorised person to deal with relatively limited, routine financial transactions.

Continuing Powers of Attorney

This can be useful where a person needs help or where the person is worried about being unable to make decisions in the future. A Continuing Power of Attorney allows for the situation, whether as a result of accident or illness, where you are incapable of making decisions for yourself. For instance, this may occur through development of illness. If you become incapable the only option is to apply for a Guardianship Order which is a cumbersome and expensive legal procedure. The CPA is a formal deed that empowers a trusted family member or friend to make decisions regarding your welfare and finances on your behalf. A CPA only becomes active when you are incapable of making those decisions.

A Continuing Power of Attorney can be drafted to suit a person’s wishes. In addition to the powers to open, close or operate any bank accounts containing funds including those held in common with other persons, such Powers of Attorney generally include the power to claim pensions or benefits, the power to sign and deliver deeds and documents, the power to make all tax returns or settle any tax claim, the power to pay any household expenses or pay the premiums on any insurance policy, and/or the power to buy, lease or sell interests in property anywhere in Scotland or abroad. They could also include, for instance, the power to pay for private medical care or residential care costs, the power to pay any debt or claim, the power to instruct lawyers to raise or defend any court actions. They can also include the power to make gifts, to run, sell or wind up businesses owned by the person, to pay for them to go on holiday or for expenses for any carers, in addition to the powers to implement suitable tax planning arrangements or to incur any other reasonable expenditure.

Welfare Power of Attorney

Unlike Continuing Powers of Attorney, which deal mainly with the power to deal with money or property, Welfare Powers of Attorney exist to give authority to persons to make decisions about your health or personal welfare.

Welfare Powers of Attorney commonly provide for the Welfare Attorney to decide where your permanent place of residence should be, to decide the type of care and accommodation best for you, to consent on your behalf to any medical treatment, to take legal action in respect of your personal welfare on your behalf, to make decisions relating to your diet or personal appearance, to make decisions in respect of your social and cultural activities, to arrange for you to undertake work or training, or to take you on holiday or authorise others to do so.

A combined and Welfare Power of Attorney

A Continuing and Welfare Power of Attorney is usually drafted to authorise a person to manage the whole of your affairs, including management of your estate, in the event that you become incapable in terms of the Adults with Incapacity (Scotland) Act 2000 (as amended).

Such Powers of Attorney are usually drafted to grant the Attorney similar powers to those granted under both Continuing Powers of Attorney and Welfare Powers of Attorney.

Conclusions

Having a Power of Attorney in place can be an important part of planning for your future. None of us can be sure of our future or when as result of accident or illness, where you are incapable of making decisions for yourself such that we are unable to deal with our own affairs. The alternative court process, where there is no Power of Attorney in place, is time-consuming and expensive. Any of our resident solicitors are able to meet with you and take instructions for the preparation of the type of Power of Attorney you or a loved one may require to have in place. 

For more information and to contact us about a Powers of Attorney, click here.

Shona Morrison, Partner


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