What is a Power of Attorney?
A Power of Attorney allows you to chose a person to act for you when you cannot or do not want to. You are called the Donor or more rarely grantor as you are giving the power to the Attorney. The Attorney then steps into your shoes and acts as if they were you.
They must always act in your best interests and so long as you have the mental capacity, then you can revoke the power and end their right to act for you at any time.
The Power Can Only Be Given
It is not possible for an Attorney to apply to become your Attorney; you must actively give them the Power and the instruction to create a Power for someone to act as your Attorney can only come from you. You must both be over eighteen and both have capacity.
What is capacity?
By capacity we mean mental not physical capacity and at its simplest it is the ability to make decisions for oneself. Generally speaking you should be able to understand the information and choices presented to you, weigh the information to determine how decision will affect you (and where relevant other people) and then be able to adequately communicate that decision. If you are unable to follow this process to make decisions, then you may be said to lack capacity.
The test is not absolute and the law recognises capacity can come and go or that it may be relative to the size, complexity and consequences of the decision being made. For instance you may be able to decide to pay a bill or install a chair lift, but not to cash in an endowment policy or sell your house.
The Mental Capacity Act 2009
Before the Mental Capacity Act 2009 you either had capacity or you did not and once you had lost it, it was gone forever. This rather Victorian view was consigned to the dustbin of history by The Mental Capacity Act, which sets out in Section 1 five principles that must be considered when dealing with the issue of capacity:
A person must be assumed to have capacity unless it is established that he lacks capacity.
A person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success.
A person is not to be treated as unable to make a decision merely because he makes an unwise decision.
An act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in his best interests.
Before the act is done, or the decision is made, regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person’s rights and freedom of action.
It should be obvious from the above that in theory at least the Donor should be actively engaged in decisions taken by the Attorney that affect him and the Attorney could be in difficulties if he does not consult with the door prior to making decisions for the Donor.
The Different Types of Power
There three several types of Power of Attorney in use:
General power of Attorney
Enduring Power of Attorney
Lasting Power of Attorney.
General Powers of Attorney
The simplest one to give and use is called the General Power of Attorney. It is a short document that you sign in front of a witness that sets out what you want to Attorney to do. It can be as broad or as narrow as you like. For instance some are limited to selling a particular property while others give the Attorney unrestricted freedom to mange your finances from collecting your income to paying your debts.
The Power is only valid so long as you have capacity and is revoked either expressly by you or if you lose capacity.
Enduring Powers of Attorney (EPAs)
Enduring Powers of Attorney (EPAs) are still valid and can be used if they are registered with the Court of Protection in the case of a Donor who has lost capacity or unregistered if the Donor still has capacity.
It is worth noting that EPAs are not revoked by incapacity, but if they are to be used after the Donor has lost capacity they must be registered. It has not been possible since October 2009 to create a new EPA, but EPAs created before that date, whether registered or not, remain legally valid.
Lasting Powers of Attorney (LPAs)
Created by the Mental Capacity Act in part to reflect changing attitudes the incapacity and in part to bring to an end the flagrant abuses of vulnerable adults by the unregulated used of EPAs these powers contain more safeguards in their creation and more supervision in their use than both the General and the Enduring Powers.
All this additional protection however has come at a considerable increase in cost both in professional fees and court fees as LPAs can only be created when the Donor has capacity and can only used once registered with the Court of Protection.
The forms are lengthy (albeit straightforward) to complete and the process takes about four months including notice periods given to potential objectors to the LPAs being given to a particular Attorney.
The Different LPAs
There are two kinds of Lasting Powers of Attorney;
Property and Affairs
The first is limited to financial matters the second to health, medical and social issues, including the power to decide whether to allow life saving treatment. There is no overlap between the two and with both types the effect of the five principles in the Mental Health Act means the Donor is not a passive actor in the decision-making process even after the LPAs have been registered.
You can have more than one Attorney and if you have two or more they can act jointly only or jointly and severally. You can also set out within the LPAs guidance on how you want future decisions to be made, restrictions on the Attorneys’ authority and you can provide that they can make some decisions jointly and some jointly or severally and if you had more than two, some by majority voting.
It is worth noting that if all decisions have to be taken jointly and one Attorney dies, the whole power fails as the surviving Attorney cannot make any decisions severally, and joint decisions are now impossible.