SIGNpost : Power of Attorney FAQ

This item is an extract of a SIGNpost article that originally appeared in the Associate Magazine, but is updated with current links,  addresses and other contact details.

When you make a POA, you appoint another person to act on your behalf. The person making the power is called the donor and the person appointed is called the attorney. By granting a POA you provide a document legally proving the attorney's powers. In general there are no restrictions on who can be an attorney, providing they have the mental capability necessary (if you wish to grant power to a minor you should take legal advice).

A General POA gives the attorney a blanket authority to act on the donor's behalf. The attorney is authorised to sign most legal documents for the donor. A General POA must be drawn up in a standard format. In England and Wales, there is a pre-printed form (CON36) available from legal stationers, although this form does not have to be used. A General POA can be typed or word processed, as long as the correct words are used (your local Citizens Advice Bureau will be able to provide you with the standard wording for a General POA).

The Limited POA gives the attorney limited powers to carry out the particular acts specifically authorised in the document. It is much more difficult to draw up a limited POA than a general one, as it must be drafted in very precise terms. If there is any ambiguity as to whether a particular power has been delegated, a court will tend to rule that it has not. You should seek legal advice if wishing to draw up a Limited POA.

An Enduring POA is the only form of POA which can continue if the donor loses the mental capability to act on their own behalf, it can be 'general' or 'limited' and must be drawn up utilising a standard format (see local CAB or solicitor for more information).

Q. What can or can't an attorney do?

A. Because it is straightforward, a General power is often granted even where an extensive authority is not required. There are only a very few things that a General POA cannot cover, the main ones being that:

• an attorney cannot sign a will or codicil for the donor, ........... and
• a third party cannot be compelled to enter into a contract with the attorney acting on behalf of the donor (for example, a life assurance company could insist on certain questions in a proposal form being answered by the donor her/himself, before allowing the proposal to go forward).

Q. Do I just appoint one person?

A. You can appoint one, two or more people as attorneys. If they are appointed 'joint' attorneys, they must always all act together. This can therefore provide a useful safeguard against fraud or improper acts by one attorney. However, the power of attorney comes to an end if a joint attorney dies or becomes mentally incapable. If two or more people are appointed as 'joint and several' attorneys, they may either act together or individually,  whatever happens to any of the other attorneys. The signature or action of one attorney is as valid as if s/he were the sole attorney.

Q. Can I grant a POA at any time?

A. A POA can be arranged at any time if you have the "mental capacity" to manage your affairs, but only an Enduring Power of Attorney (see separate item on this topic ») can continue if the client loses this capacity.

Therefore, if you are either now "mentally incapable" or have been diagnosed with a degenerative disorder (e.g. Alzheimer's), you cannot grant a Power of Attorney, or even an Enduring Power of Attorney, and you must apply to the Court of Protection (see below). This may also apply if you have been diagnosed with a disorder that may make it difficult to communicate your wishes (you should seek legal advice if this is the case).

The donor must sign the power of attorney. The signature must be witnessed and attested by one other person. If the donor is physically incapable of signing the document, another person in his/her presence can do this, but two witnesses must attest that signature. Neither the attorney nor her/his spouse should act as a witness.

Q. Can I still act on my own behalf?
 
A. Yes, you do not change your own power to act personally on your own behalf by granting a POA.

Q. How long does a power last?

A. A POA can be limited to a specified period (however, be cautious as this may cause problems if transactions are not completed by the specified date). Alternatively, a POA can be drawn up to expire when certain specific duties have been completed. If these are not included then it will remain valid until:

• it is revoked by the donor, the attorney, or a court order;.....or
• or the donor or attorney dies; .........or
• the donor or attorney are declared bankrupt; ..........or
• the donor becomes mentally incapable.

Note: remember to notify the attorney/donor (and any relevant third parties) if you are terminating a POA. Provided that neither the attorney nor any third party with whom s/he was dealing knew that the power of attorney had ended, any transaction carried out by the attorney could be considered valid.

Q. Does it have to be a Power of Attorney?

A. A POA provides you with the ability to be more flexible as it can cover specific acts or be general in nature. However, there are ways you can arrange to have specific areas of your financial affairs handled by someone else without granting a POA. They can be arranged at any time if you have the "mental capacity" to manage your affairs.

For example, if you are temporarily unable to cash your social security benefit you can fill in the back of the giro or order book to allow someone else, called an agent, to cash it. In addition you can also appoint another person, known as an appointee, to act on your behalf when dealing with any aspect of a benefit claim. You should contact the office that deals with the relevant benefit for further information.

If you only want to give somebody the power to operate a bank account on your behalf, a letter to your bank is normally sufficient or you could use a "third party mandate" form that the bank will be able to provide.

Q. What should I do if the person does not have the mental capability to grant a POA or has been diagnosed with a degenerative disorder?

A. You must either seek legal advice or contact the Public Guardianship Office that is responsible for Court of Protection and guardianship issues in England and Wales; they also produce a number of useful guides.

The Public Guardianship Office,
Archway Tower,
2 Junction Road,
London, N19 5SZ.
E-mail:   custserv@guardianship.gov.uk
Website:   http://www.guardianship.gov.uk
Telephone 0845 330 2900 for Customer Literature and Application Forms
Fax 0870 739 5780
Telephone 0845 330 2963 for Enduring Power of Attorney (EPA) Helpline (9am - 5pm, Mon - Fri)
Fax 0870 739 5799