A Foolproof Guide To Power Of Attorney

Can you explain what a power of attorney is and its purpose in legal terms?

A power of attorney is a legal document that allows an individual (often called the donor) to nominate someone to act on their behalf and make personal decisions for them. Such a document can be put in place if they lack the mental capacity to make decisions themselves or if they need help making a decision during a specific period of time. A power of attorney may relate to one’s personal affairs and cover all decisions related to finance, property and healthcare; however, certain powers of attorney can also cover business matters.

What are the different types of power of attorney that exist?

A lasting power of attorney (LPA) is a legal document that allows the person appointed to make decisions on behalf of the person making the LPA. LPAs are governed by the Mental Capacity Act 2005 and there are two types of LPAs: one for health and welfare and one for property and financial affairs. There are several formalities and requirements surrounding the making of LPAs, including the order and format in which the LPA is signed and also the requirement that the LPA must be registered with a government body in England and Wales, called the Office of the Public Guardian. LPAs can last past someone losing mental capacity, but the finance and property LPA also has the option to be used while the person still has capacity to make their own decisions. 

A general power of attorney (sometimes referred to as an ordinary power of attorney) is a legal document that gives the attorney the authority to act on behalf of someone else. General and ordinary powers of attorney are governed by the Powers of Attorney Act 1971. They are more flexible than LPAs and can be tailored to delegate decision-making powers only in certain situations or in relation to specific assets or transactions, however that can also be broad enough to touch upon all matters related to finance and property. This type of power of attorney is usually used for short-term or specific purposes, such as when the person is travelling abroad or is unable to manage their financial affairs due to temporary illness or perhaps physical incapacity.

Enduring powers of attorney (EPA) were replaced when the Mental Capacity Act 2005 came into effect on 1 October 2007. LPAs replaced EPAs, however an EPA will still be valid if it was created before this date. The two types of documents are broadly similar and there is unlikely to be a need to replace your EPA with an LPA.

How does someone set up power of attorney? 

It is possible to create an LPA online on the Gov.UK website without legal guidance, as one only needs to know their own and their attorney’s names, addresses and dates of birth. Notwithstanding this, the creation of an LPA can get very complex very quickly once you start making elections in terms of how your assets are managed and also important medical decisions such as the circumstances in which you wish to not be resuscitated.  One would also need to find a certificate provider who is the person that will confirm the individual has mental capacity, is creating the power of attorney of their own free will and has sound knowledge of the document and the implications. This can be someone close to them (but not a blood relation), be over 18 and they must have known the donor for at least two years. They can also be a professional such as a solicitor, a GP or a social worker.

Then, the LPA must be signed in a very specific order and in a very specific format. An ordinary or general power of attorney is different and is a much simpler document, however it must be signed by the donor as a deed in the physical presence of two witnesses. 

What are the key responsibilities of an individual who has been appointed power of attorney?

The key responsibilities of your attorney will vary depending on what power of attorney you appoint. 

An LPA relating to health and welfare will mainly take care of decisions relating to those two areas, things like: daily routine, washing and eating, medical care and where the donor lives. A property and financial affairs LPA deals with decisions such as: money, tax, bills, bank accounts, property, and investments. An ordinary power of attorney will be able to make decisions about someone’s money or property for a short period of time, for example, while they are on holiday or while they are recovering from surgery. In any event, no matter what type of power of attorney is made, there are certain responsibilities and expectations on every attorney. The attorney's responsibilities are outlined by the Mental Capacity Act 2005 and include the following key duties:

1. Acting in the donor's best interests: The attorney must always act in the best interests of the donor, taking into consideration their wishes, feelings values, and any instructions specified in the LPA.
2. Making decisions: The attorney is authorised to make decisions on behalf of the donor in areas specified in the LPA, be it financial matters or health and welfare issues. The attorney should consult the donor whenever possible and consider their previously expressed wishes. Where possible, the attorney should give effect to the donor’s wishes if they are aware of them or if they have been communicated to them previously. The attorney’s initial primary duty is to give effect to the donor’s wishes, even if the attorney does not necessarily agree with them. 
3. Exercising care and skill: Attorneys are expected to exercise a reasonable level of care, skill and diligence in carrying out their responsibilities. They should make decisions based on accurate information and seek professional advice when necessary.
4. Avoiding conflicts of interest: Attorneys must avoid situations where their own interests may conflict with the donor's interests. They should not make decisions that primarily benefit themselves or others, unless it is specifically authorised in the LPA or by the court.
5. Maintaining confidentiality: Attorneys have a duty to keep the donor's personal information confidential, unless disclosure is necessary and in the donor's best interests. They should respect the donor's privacy and not disclose sensitive information unnecessarily.
6. Keeping records: Attorneys are required to keep clear and accurate records of all transactions and decisions they make on behalf of the donor. This includes financial transactions, communications with third parties and any other relevant information.
7. Complying with the law: Attorneys must act in accordance with the relevant laws and regulations, including the Mental Capacity Act 2005. They should be aware of their legal obligations and act within the scope of their authority as defined in the LPA.
8. Being accountable: Attorneys are accountable for their actions and may be required to provide an account of their decisions and transactions if requested by the Office of the Public Guardian or by the court. They should be prepared to explain and justify their actions, if necessary.

It is important for attorneys to understand their responsibilities and act in the best interests of the donor at all times. If an attorney fails to fulfil their duties, they may be subject to legal action or removal from their role. 

Are there any circumstances or events that can terminate or revoke a power of attorney? 

One of the most important differences between a general power of attorney and an LPA is the duration of the document. A general power of attorney is valid for up to 12 months, subject to the donor retaining mental capacity within that time, and can be revoked at any time by the donor, while an LPA remains valid even if the donor becomes mentally incapacitated. An LPA can be cancelled as long as the donor has mental capacity. The donor must sign a document called a “deed of revocation” which must then be submitted to the OPG so that the LPA registration can be cancelled.

In addition, an LPA ends when the donor dies which must be reported to the OPG and the original LPA should be sent to the OPG for cancellation. The LPA will then be removed from the register to confirm it is no longer effective. 

Can you choose to stop acting as power of attorney?

It is possible to choose to stop acting as an attorney which is known as “disclaiming” one’s attorneyship. To stop being an attorney, the individual must fill in and send a notification form to the donor (if the LPA has not been registered), or to the donor and the OPG (if the LPA is registered), and any other attorneys appointed under the LPA. The donor can revoke an LPA if they have mental capacity to make this decision. To do so they must send two documents to the OPG: the original LPA and the deed of revocation. Such a deed of revocation must be signed by the donor in the presence of two witnesses and must confirm the information about the LPA’s signing and registration and confirm that the donor wishes to revoke the powers under the deed. 

Can power of attorney focus solely on healthcare or medical-related decisions?

It is possible for a power of attorney to deal solely with healthcare decisions if you complete the LPA that relates to health and welfare. An attorney appointed under a health and welfare LPA will handle anything that involves medical treatment, surgery, general wellbeing and day-to-day care. An attorney appointed to make decisions under a health and welfare LPA must be an individual person over the age of 18 with mental capacity. Additionally, the POA appointed to assist with health and welfare can only make decisions when the donor has lost their mental capacity. If the donor still has mental capacity, the POA can only facilitate the communication of their decisions. 

When appointing an attorney for health and welfare under a Lasting Power of Attorney (LPA) in England, there are several important considerations to keep in mind. These include:

1. Trustworthiness and reliability: Choose someone you trust implicitly to make decisions regarding your health and welfare. This person should have a good understanding of your values, beliefs and preferences, and be committed to acting in your best interests.
2. Communication and understanding: Select an attorney who can effectively communicate with healthcare professionals, family members and other relevant parties. They should be able to understand medical information, ask pertinent questions and relay your wishes clearly to others.
3. Shared values and beliefs: Consider whether the person you are appointing shares similar values and beliefs regarding health and welfare decisions. This can help ensure that they will make decisions that align with your wishes, even if you cannot communicate them at the time.
4. Availability and proximity: Choose an attorney who is readily available and can be easily reached in case of emergencies or important medical decisions. Consider their proximity to you, as it may affect their ability to be physically present when needed.
5. Emotional resilience: Dealing with health-related decisions can be emotionally challenging. Select someone who can handle the emotional aspects of these decisions and advocate for your wellbeing in difficult situations.
6. Medical knowledge or willingness to learn: While it is not necessary for your attorney to have medical expertise, having a basic understanding of medical terms, procedures and treatment options can be beneficial. Alternatively, they should be willing to learn and seek appropriate medical advice when needed.
7. Respect for your autonomy and wishes: Your chosen attorney should respect your autonomy and make decisions in line with your previously expressed wishes, values and beliefs. They should not impose their own preferences or make decisions based on what they would personally choose.
8. Open communication and involvement: It is important to select an attorney who is willing to involve you in decision-making to the extent possible. They should consult with you, if feasible, and take your views into account before making significant health and welfare decisions.
9. Appointment of multiple attorneys: You may consider appointing multiple attorneys, especially if you believe that different individuals can bring diverse perspectives and expertise to the decision-making process. In such cases, you can specify whether they should make decisions jointly or individually.
10. Whether they can make decisions about life-sustaining treatment: It is a separate issue for you to confirm that an attorney can make decisions about life sustaining treatment in the LPA. Life sustaining treatment includes surgery, cancer treatment, blood transfusions and the operation of life support machines. A person may have all of the above attributes but a donor may still wish for them to not make decisions about life sustaining treatment and instead wish to defer to the views and advice of medical professionals. 

Are there any legal safeguards in place to prevent abuse or misuse of a power of attorney? 

The Office of the Public Guardian (OPG) has safeguards to protect a donor from being mistreated by their attorney. By law, they will review any concerns and start an investigation if a suspicious circumstance is raised to them. An individual who is concerned about the actions of a POA can report this to the OPG, providing:

• the donor’s details (including full name, address and date of birth);
• the date that they first noticed the concerning behaviour/conduct;
• whether the concern is ongoing; 
• any evidence that supports the concern, for example, financial records or copies of text messages;
• what they know about the donor’s mental capacity, including copies of any mental capacity reports or names of who might have these; and 
• their contact details.

If this information is not accessible, it is still possible to report concerns. Once a concern is identified and reported to the OPG, the OPG has powers to investigate the conduct of the attorney. The manner of investigation will change from case to case but will often include contacting individuals and institutions linked to the donor, requesting copies of accounts and financial transactions, reviewing decisions and reviewing any OPG records. The OPG may also raise enquiries with or request information from the attorney directly. 

After assessing the outcomes of the investigation, the OPG may also ask a Court of Protection visitor to assess the donor’s mental capacity and ask the donor directly about the reports they have received. They will also ask the attorneys or deputies for explanations and evidence about the concerns and ask social services for any information regarding the person’s mental capacity, finances and care, and whether anyone has reported safeguarding concerns to the local authority. 

If the OPG has serious concerns about the wellbeing of the donor, they can ask the Court of Protection to make a decision, which may lead to the LPA being cancelled, the removal of one or more attorneys or the appointment of a suitable person to replace the attorney or deputy. 

Can a power of attorney be modified or amended after it has been executed? 

It is possible to change your power of attorney, but a donor must have mental capacity when they do so in order for the arrangements they put in place to be valid. To make any modifications to an LPA, a formal deed of revocation will need to be executed and submitted to the OPG. Following this, a fresh LPA form must be completed, signed in the prescribed order and in the prescribed way and then registered with the OPG. LPAs are very heavily regulated due to the nature of the decisions that are delegated through their use. For this reason, they are also quite rigid documents, and all amendments must be formal and must be registered. 

What are some common pitfalls or mistakes that individuals make when creating power of attorney? 

There are multiple pitfalls that a donor may be faced with when completing an LPA application form. Although the forms might seem quick and easy to complete, they do contain technical legal and medical terminology that may be unfamiliar to the donor, which could possibly lead to confusion and consequences that were not intended. When creating a Lasting Power of Attorney (LPA), there are some common pitfalls to be aware of. These include:

1. Using the correct forms: it is vital that the correct form is used for each LPA. If one is looking to create a financial and property LPA, then they should select the form regarding financial and property. Likewise, if an individual is looking to create a health and welfare LPA, then that form should be the form that is used.
2. Delaying the creation of an LPA: Procrastinating or delaying the creation of an LPA can be a significant pitfall. If the donor loses mental capacity before an LPA is registered, it may be necessary to apply for a deputyship order through the Court of Protection, which can be a more complex, expensive and time-consuming process.
3. Lack of clarity in instructions: Failing to provide clear instructions in the LPA can lead to confusion and disputes among attorneys and other involved parties. It is essential to specify the donor's wishes, preferences and values regarding important decisions and provide explicit guidance for the attorneys to follow.
4. Inadequate choice of attorney: Choosing the wrong person as an attorney can have serious consequences. It is crucial to select someone trustworthy, reliable and capable of making decisions in the donor's best interests. Consider their relationship with the donor, their availability and their ability to handle financial and legal matters. In addition, the attorney may not be appropriate if they are the same age or older than the donor as they may pass away or lose mental capacity themselves in years to come. In that circumstance, the donor should consider appointing a second attorney or a replacement attorney who is younger such as a child, a niece or a nephew. 
5. Lack of understanding of certain decisions made within the LPA document: one of the common issues that may arise for a donor is appointing attorneys on a “joint” basis, instead of on a “joint and several” basis. It is important to note that if attorneys are appointed on a joint basis, they must all agree on a decision for it to prevail. If one attorney suddenly passes or is no longer able to act as an attorney, then the LPA is ineffective as no decisions can possibly be made unanimously. The final decision cannot be confirmed if all the attorneys do not agree on the terms, which may come as a surprise to an individual who believes the attorneys can make decisions separately. By appointing an attorney on a “joint and several” basis, the donor is allowing the attorneys to make decisions separately and no communal agreement is needed. This can be more practical, but it comes with its own risks. 
6. Insufficient powers granted: It is important to ensure that the LPA grants adequate powers to the attorney to handle the specific areas required. Failing to include necessary powers could restrict the attorney's ability to act effectively on behalf of the donor. For example, donors unfamiliar with the LPA forms make a common mistake regarding the life sustaining treatment section of the LPA form. If this is left blank, then attorneys will not be able to make decisions regarding the donor’s potential life sustaining treatment which could be a life-threatening mistake to make. It is crucial that, if the donor wants their attorneys to be able to make decisions on this matter, then they must sign in the relevant part of the life sustaining treatment part of the form. 
7. Failure to notify relevant parties: Once the LPA is registered with the Office of the Public Guardian (OPG), it is important to inform relevant individuals and institutions, such as healthcare providers, financial institutions and utility companies. Failure to do so may result in the attorney facing obstacles when attempting to act on behalf of the donor.
8. Lack of periodic review: Circumstances and relationships can change over time, so it is advisable to review the LPA periodically to ensure it still reflects the donor's wishes and remains relevant. If necessary, the LPA can be amended or revoked by following the appropriate legal procedures.
9. Inadequate understanding of the LPA process: Creating an LPA can be complex, so it is important to have a clear understanding of the legal requirements, procedures and implications. 

The creation of an LPA is a significant decision, and it is crucial to approach it with careful consideration and seek appropriate guidance to avoid potential pitfalls.

For more information & advice around power of attorney visit BrittonTime.com 

DISCLAIMER: Nothing in this article is intended to constitute financial or legal advice. Any views expressed reflect those of the individual and not SheerLuxe. Always consult an independent professional before making any legal decisions that might affect your medical or financial future.