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Ordinary Power of Attorney and Enduring Powers of Attorney

We do not like even to consider the possibility of being incapable of managing our affairs, still less actually make plans for such an eventuality. Yet putting the appropriate plans in place before an emergency arises will save money, time and hassle. In the same way that writing a Will simplifies matters after someone dies an Enduring Power of Attorney minimises problems and distress in the event of someone becoming incapable of managing their affairs. It is assumed by many that people make Powers of Attorney in their old age, but undoubtedly this is not the situation where Enduring Powers of Attorney can prove a valuable tool.

There are two distinct types of Power of Attorney.

Ordinary Power of Attorney - is a legal document in which one person (the Donor) authorises another person (the Attorney) to look after his or her property and financial affairs for whatever reason. If the donor becomes mentally incapable, the Power is automatically revoked and no one can deal with that person’s affairs. An application must be made to the Court of Protection for a Receiver to be appointed, which can be a rather long winded and costly process.

Enduring Power of Attorney - is a power of attorney, which continues even if the donor becomes mentally incapable. The Attorney must however register the power with the Court of Protection when the donor becomes or is becoming mentally incapable but not before.

 Giving up control

Obviously the ideal of relinquishing control of your personal or business affairs is a difficult and sometimes frightening decision. Specific advice should be given on each case and the terms of the Power of Attorney can be altered according to requirements. An Enduring Power of Attorney can include a restriction stating that it does not come into effect unless the donor has become mentally incapable. Alternatively no specific restriction need be included, but the Power of Attorney can be lodged with a solicitor or your legal services representative on the understanding that it will not be used until the donor gives their authority. The latter is often the most appropriate as it provides for a situation where a person becomes physically but not mentally incapable (for example in a road traffic accident), but they are unable to deal with their financial affairs.

Flexibility

A Power of Attorney can be general covering all of a person’s property and affairs or it can be restricted to specific areas. A donor might choose a specific person familiar with their business affairs and confine that Attorney’s authority to those specific assets. Alternatively it is also possible to have a number of Enduring Powers of Attorney appointing different Attorneys to help with different assets.


BENEFITS -

  • Used when the donor cannot act on his/her own behalf. For example, when incapacitated by illness, accident or old age.
  • Allows the attorney to deal with the donor’s assets as if he/she were the donor him/herself.
  • Avoids having to go to the Court of Protection, which is expensive, time consuming and demanding (in terms of the keeping and submitting of records of the donor’s accounts).

FEATURES -

  • A Legal document granting the power and authority of the donor to the attorney.
  • The only legal document that can grant this power and authority in advance.
  • Ceases to have effect upon the death of the donor or on revocation by the donor.
  • If the donor jointly owns a property with someone else then in order to sell, the property an attorney other than the co-owner is necessary.
  • The donor must be an adult (over 18 years of age) and of sound mind and understanding when the Enduring Power of Attorney is created.
  • Each signature on the document must be independently witnessed.


Note: The donor is the person granting the Enduring Power of Attorney. The attorney is usually a relative of the donor, such as their spouse, an adult child or a close friend.