Powers of Attorney

A Power of Attorney (POA) is a proactive way for clients to ensure that certain of their affairs are managed according to their wishes in the event that they are not able to do so themselves. The legal definition of someone being 'incapable' in this context is that a person is 'incapable'of:

• acting, or

• making decisions, or

• communicating decisions, or

• understanding decisions,

• retaining memory of decisions. [1]

If an Adviser is concerned that a client may be 'incapable' in this way at some point in the future, and that this will affect their home, financial affairs or welfare, it would be a good idea to suggest that the client considers making a POA to protect themselves in that eventuality. This is a specialised area of law and clients who wish further information should seek advice from a solicitor who has experience in 'private client' law, particularly in dealing with adults with incapacity issues.

A POA is a legal document, prepared in accordance with a client's wishes, to give another person whom they trust the authority to act on their behalf and make important decisions in relation to:

• their home or other property (this is called a 'Continuing Power of Attorney' and may include powers to sell the person's home or rent it out for example), and/or

• any financial matters (this is called a 'Continuing Power of Attorney' and may include powers to write cheques in the person's name or to transfer or invest money on their behalf, for example. It can also include power to deal with any social security benefits, including any necessary applications and appeals), and/or

• the welfare of the person (this is called a 'Welfare Power of Attorney' and may include matters such as where they live and what care they receive for example).

There are various 'styles' of POA and the contents of each POA will depend on the needs and wishes of each individual client. However, it is helpful to look at a sample POA to get an idea of the language used and the type of matters that can be addressed in the document.

Many solicitors who specialise in this field strongly recommend that their clients grant wide-ranging POAs, covering a large number of matters, so as to ensure that, if and when the document has to be activated, the attorney has the widest powers possible to assist the granter. Specific powers are not implied; in other words, unless they are specifically detailed in the POA, the attorney will not have them.

There is further information on how the different types of POA can be helpful to clients further down this page.

A POA is prepared by a solicitor (it is advisable for a solicitor to prepare a POA), and signed by the person who wishes to make it (called 'the granter').

POAs are governed by the Adults with Incapacity (Scotland) Act. [2] This is a specialised area of law and specific legal advice should always be obtained. Advisers should simply be aware of the law and any potential issues that may arise for their clients and mention the possibility of granting a POA where appropriate, before referring that client to a solicitor who deals in 'private client' law.

Clearly, a POA is a legal document that can strongly impact on a person's home and the financial matters relating to their home, as well as where they live (for example, if they require to move into long term residential care).

As stated above, a POA is a proactive way for clients to ensure that certain of their affairs are managed according to their wishes in the event that they are not able to do so themselves. It can be a positive way for clients to take control of their affairs in the future and can serve to alleviate some worry about future incapacity. It can also be a comfort to those close to the person granting the POA to know that they have articulated their wishes. In turn, this may reduce stress of friends and relatives of someone who has granted a POA as they will not have to make ‘big’ decisions about what that person would have wanted; by granting a POA the granter has already expressed their wishes clearly.

Where appropriate, advisers should be aware of these potential issues. There is more information on circumstances in which Advisers may consider suggesting to clients that a POA may be appropriate below.

An adult over the age of 16 [3] can grant either a 'continuing power of attorney' or a 'welfare power of attorney' in relation to their own affairs. A person who grants a POA is known as 'the granter'. To grant a POA, a person must be deemed to be 'legally capable' (or have the 'legal capacity' to do so). The legal term for having legal capacity is 'capax'. In other words, to grant a valid POA, the grantor must be fully aware of what they are doing and understand the implication of the document they are signing and the powers it will give to another person ('the attorney').

If the POA is going to take effect when the granter can no longer act on their own behalf, the signed POA must be accompanied by a certificate, signed by a solicitor, stating that the grantor fully understand what they were doing by granting the POA. [4]

It is advisable to get a solicitor to draw up a POA but it is the client or 'granter' who decides what goes in it and actually 'grants' the powers to another person. Where there is no POA in force, the family of the client may have no alternative but to apply to the court for a financial/welfare guardianship. This is a very complex legal process which can be expensive if Legal Aid is not available and it can take anything between three and six months to complete. Granting an appropriate POA avoids that possibility.

As well as the powers conferred on the attorney by the granter in the legal document, there are specific obligations enshrined in law that the attorney must comply with. [5] Again, clients should obtain specific legal advice from a solicitor on these but advisers should nevertheless be aware of these protections.

It is a legal requirement that an attorney should at all times act in the interest of the granter of the document and, so far as possible, in accordance with the granter’s present and past known wishes. [6]

There are many circumstances in which a Power of Attorney may be appropriate or helpful to a client. Unfortunately, few people are aware of the fact that this is a proactive measure that can be taken to make sure that a client’s wishes are respected and adhered to in the future in the event that the client can no longer act on their own behalf (in other words, if they become 'incapable' of acting on their own behalf in the future).

The legal definition of someone being 'incapable' in this context is that a person is incapable of:

• acting, or

• making decisions, or

• communicating decisions, or

• understanding decisions,

• retaining memory of decisions. [7]

If an adviser is concerned that a client may be 'incapable' in this way at some point in the future, and that this will affect their home, financial affairs or welfare, it would be a good idea to suggest that the client consider making a POA to protect themselves in that eventuality.

A POA may be something for clients to consider if they:

• are concerned about potential ill health in the future, for example, dementia

• have fluctuating mental health problems and cannot always manage their own affairs

• want to plan for future eventualities and make sure that their wishes are recorded and carried out

• have been diagnosed with a medical condition that may affect their ability to act on their own behalf in the future

• would prefer to entrust any important decisions about their home, financial affairs or welfare to another person for the future.

There may be other circumstances in which an adviser may consider that a client would benefit from granting a POA. The above list merely contains suggestions and is not exhaustive.

There are several ways in which a POA may be helpful to a client who is concerned about the management of their affairs in the event that they can no longer manage them themselves. Clearly, it is very distressing for anyone to think that they may no longer be able to live in their own home or manage their budgets due to mental incapacity but a POA can be helpful to clients in regaining some control in planning for the future. Therefore, advisers should be aware of the main benefits of considering a POA which include:

• giving clients a choice in who will manage their affairs if they cannot

• giving clients reassurance that their affairs will be managed by someone they trust if they cannot do so. This could be of particular comfort to someone who is worried that they will have to move out of home and into residential care for example

• they are quick and easy to arrange

• the legal fees can covered by legal aid if the client is eligible for that. If not, it is comparatively cheap to get a solicitor to do this

• it is quite an informal way of managing affairs (as opposed to relying on the court or state intervention at a later date)

• it may minimise distress to relatives and friends of the client who are worried about management of affairs and who take some comfort knowing that their loved one made provision in accordance with their own wishes.

There are a variety of circumstances in which a POA could help a client and this depends on what powers the grantor has given the attorney in the POA. Advisers should be aware that there are two types of POA, continuing and welfare. Each type addresses different needs and clients can choose what they want the POA to cover. It is strongly advised that clients should grant both financial and welfare powers and that these can be readily contained in one document. A solicitor should be instructed to prepare the legal document but it can be useful to look at an example or 'style' POA document. Further examples for different styles of POAs can be found on the Office of the Public Guardian for Scotland website. It is important to be aware that welfare powers only take effect when the granter of the POA has, in fact, lost the capacity to act on their own behalf. In other words, while the granter can still make their own decisions (i.e. still has 'legal capacity'), they cannot be forced to move against their will.

Clients must get detailed legal advice on which type of POA they wish to grant but Advisers should nevertheless be aware of the type of situation in which an appropriate POA could help. The following lists provide some examples but are not exhaustive. Advisers should consider these possibilities in relation to appropriate clients but this list is exemplary and not exhaustive.

A continuing POA may allow the attorney to act on behalf of the grantor in relation to:

• selling their home

• renting out their home or other property

• paying for a home (including making mortgage payments, paying rent, council tax and other bills)

• arranging and paying for carers and additional help and support within the home

• managing bank accounts including paying in and withdrawing money for the benefit of the grantor

• setting up or closing accounts.

A welfare POA may allow the attorney to make decisions on behalf of the grantor in relation to:

• provision of care for the grantor (for example, moving into a nursing home)

• ensuring that the care is paid for

• medical care required by the grantor.

All POAs granted under the Adults with Incapacity (Scotland) Act are supervised by the Office of the Public Guardian. The Office of the Public Guardian, based in Falkirk, is part of the Scottish Courts Service and it has a variety of different functions under the legislation, including to provide advice and guidance. This office covers Scotland and it is separate from the equivalent organisation in England and Wales. Further information can be found on the Office of the Public Guardian website for Scotland.