Your Guide To Different Sorts Of Powers Of Attorney

A power of attorney is a legal process which enables a donor (the person giving the power) to appoint one or more persons (the attorneys) to act on their behalf when dealing with personal finances and property.

If you are appointing someone to act as your attorney, it should be someone you know well and trust because they are going to have complete control over your financial affairs and or property.

Lasting Powers and Enduring Powers of Attorney

Lasting Powers of Attorney [ often referred to as an LPA] replaced Enduring Powers of Attorney [or EPA] as of 1st October 2007. Existing EPAs remain valid, but it is no longer possible to make a new one.

Lasting Powers of Attorney come in two forms – Property and Affairs, and Personal Welfare. The first authorises the attorney to make decisions concerning the donor’s property and affairs; the second enables the attorney to make decisions about matters concerning the donor’s personal welfare, such as where he or her lives, is cared for and the healthcare he/she receives.

A donor can make either or both, but before the attorney has any authority the documents must be registered with the Public Guardianship Office in London. There is a registration fee payable of 150 per document.

The advantage of LPAs is that they are not revoked by a subsequent loss of capacity. If the donor becomes unable to deal with their financial affairs, the attorney can carry on and manage these on the donor’s behalf. Remember – if you don’t have an appropriate LPA or EPA, and you lose capacity, you may find that your loved ones have to go through the delay, stress and expense of an application to the Court of Protection.

What are the alternatives?

General Powers of Attorney s10 Powers of Attorney Act 1971

These are quite straightforward authorisations which can be used for wide ranging use or specific periods or events, such as the sale of a property if it is in your sole name. They are ideal, for example, where someone has to spend time abroad and needs to entrust the management of business or financial interests to their spouse. They can only be used for the management of financial affairs and cannot cover personal welfare. The attorney can do anything he thinks fit in relation to the donor’s property and affairs.

General Powers do not give attorneys any powers to carry out the donor’s role as a trustee: this would be the case where property is owned by more than one person went joint owners are treated as trustees of the property. I would not cover you if you are an executor or trustee of someone’s will: a specific power of attorney will be needed to cover this.

General Powers automatically end if the donor dies, loses mental capacity or becomes bankrupt otherwise, the power remains valid until it is revoked (best done in writing): although it is common for powers to be granted for a specific period to cover, for example, absence abroad.

Trustee Powers of Attorney (s25 Trustee Act 1925)

These are similar to General Powers but can be used specifically in connection with trusts of which you are a trustee or for sale of property where you are a joint owner. They cannot last for more than 12 months. Where you are joint owner of property, it is advisable to appoint a 3rd party rather than your co-owner.

Trustee Powers automatically end 12 months from the making of the power, if the donor dies, loses mental capacity or becomes bankrupt, otherwise, the power remains valid until it is revoked (best done in writing).