Can you tell me what I would have to do to set up power of attorney for my mother-in-law who is 79 and we have noticed that her memory is going?
This is a common type of enquiry for solicitors.
A person can only grant a Power of Attorney if they still have legal capacity.
They must be in full charge of their faculties.
The person has to agree the terms of the Power of Attorney, which will contain a lengthy list of powers. They have to sign the document.
If the mother-in-law’s memory problems amount to a medical condition such as dementia, it may be too late to set up a Power of Attorney.
Where the adult is already mentally incapacitated, the likely need is for a Guardianship application.
A Power of Attorney is a valuable and useful document.
It’s a protective step – a form of insurance against possible future mental or physical incapacity.
A Power of Attorney authorises someone else to do certain things in relation to property and financial matters. A financial or ‘continuing’ Power of Attorney can be operated while the person who granted it still has capacity – which could be for reasons of convenience. But the Power of Attorney remains effective if the adult later loses capacity. It’s known as a continuing power of attorney for that reason: it still continues after you, as the adult, lose capacity to make decisions and manage your affairs.
You can also can nominate a welfare attorney to make personal welfare decisions for you. Examples would be decisions about where you should live and who you should socialise with. The welfare part can only become effective after you lose capacity.
What sort of person do you need as your attorney?
Given the nature and importance of the decisions an attorney may have to make, it is crucial that you, as the adult making the Power of Attorney, choose a person (or persons) you can trust and can rely on to act in your best interests. In other words, choose someone you don’t think is likely to run off with your money.
In this article, we will look at 3 possible objections to Powers of Attorney.
Can a good case be made for any of them?
- Firstly, there’s the avoidance technique of not making a Power of Attorney at all – or of putting it off until you are “old”.
- Secondly, there is the possibility of granting a Power of Attorney but restricting the powers you give to your attorney.
- Thirdly, we consider a scenario in which you complete the Power of Attorney but do not register it immediately with the Office of the Public Guardian – in other words, delay registration “until the Power of Attorney is actually needed”.
Let’s look at the first of these
A. Putting off granting a Power of Attorney
You don’t have to have been in practice long as a solicitor to have experience of a client who apparently wants to make a Power of Attorney but has second thoughts.
Backing out of signing a Power of Attorney may come as late in the process as the meeting to sign the finalised document. Right at the point when just about all the work’s been donw.
Often, you will find younger family members in the background encouraging their senior relative to put a Power of Attorney in place.
The elderly client may feel irritated that their abilities are being questioned.
Part stubbornness and part fear may cause them to hesitate in granting a Power of Attorney.
But it is worth remembering that the attorney is no more than an agent. Powers granted can be removed. While you retain legal capacity, you can revoke your Power of Attorney if you wish.
If it’s known for older people to hesitate in granting Power of Attorney, it’s not surprising that younger folk tend to have even greater objections.
One view is that the granting of a power of attorney is a step you should take only once you retire.
For several reasons, that viewpoint is misplaced.
The granting of a Power of Attorney is something which you should consider at any age:
- A young person could be fit and healthy but be involved in a car accident which results in brain damage and leaves them permanently incapacitated.
- Illnesses, such as stroke or early-onset dementia (which could affect someone as young as 50) can lead to incapacity.
You should not put off granting a power of attorney.
It is a protective step. It’s an insurance against the risk that you suddenly become incapacitated. It’s not an admission of weakness or in itself a sign that you’re losing your faculties.
Let’s move on to look at the second objection or limitation to a Power of Attorney on our agenda.
B. Limiting the powers given to the Attorney
Powers under a Power of Attorney have to be expressed clearly.
In practice, you see a lengthy list of tasks the attorney is allowed to perform for the adult. You might think that a single general power along the lines of “manage my affairs to the same extent as I could do myself” would be enough but it is not.
As an example, a simple authority to ‘operate’ a bank account may not be accepted by a bank. A bank may also not allow an attorney to ‘close’ an account even though the power is given to ‘create’ the account. You need to include powers to open and close bank accounts for it to be clear enough.
If you’re going to grant a Power of Attorney, it is better to grant a full/wide range of powers from the beginning rather than take the risk that you leave a specific power out that you find out later on you wish you had inserted.
Again it comes back to trust.
You should not appoint someone as your attorney under a Power of Attorney unless you have full trust in that person. So there is no point in inserting only restricted powers for the attorney from the outset.
Our argument so far is that (a) you should not delay in making a Power of Attorney and (b) you should not restrict the powers you grant under a Power of Attorney. Let’s look at our third ‘objection’ in relation of Powers of Attorney.
C. Delaying the registration of your Power of Attorney after you have signed it
All powers of attorney granted after 02 April 2001 must be registered with the Office of the Public Guardian (“OPG”) – based in Falkirk – before they can be used.
OPG is the official who has responsibility for overseeing the actings of the attorney.
Most solicitors will register a power of attorney immediately.
There’s a fee to pay for registration.
To save expense, you could choose to leave the document unregistered meantime. This means it is unusable in the meantime.
You could delay registration until the Power of Attorney needs to be used.
However, there is a real risk in not registering a power of attorney immediately.
Imagine the adult later becomes permanently incapacitated. If the Power of Attorney is only then sent to OPG and they find the document to be defective in some way, it will be too late to correct it. The adult would not have capacity to sign a corrected deed.
A similar situation can arise if the Power of Attorney contains a provision that it should not be registered with OPG until the incapacity of the adult has been certified by a medical practitioner. This again raises the spectre of a late and unsuccessful attempt to register a Power of Attorney.
In addition, with the processing time for Powers of Attorney through OPG being 2 to 3 months unless they are required urgently, this would delay the attorney being able to act unless there was a good reason for the application to be pushed through.
A better view is that, although the Power of Attorney comes into force as soon as it is registered it doesn’t mean that it has to be used. In any event, whilst the adult has capacity, no one can overrule their decision.
If the solicitor only sends out a copy of the Power of Attorney to the adult after the document is completed, their attorney can’t have the actual document until it requires to be used.
On balance, the disadvantages of delaying registration with OPG outweigh the advantages.
Firstly, you should not delay in making a Power of Attorney.
Here’s an example of one clear benefit of having a Power of Attorney in place. In some circumstances, local authorities can move an incapable adult into a care home without the consent of the adult’s family. But if there is a welfare Power of Attorney in place the local authority cannot take this route.
Secondly, as we have seen, you should not seek to restrict the powers of any attorney you appoint. Wide powers are essential if your attorney is going to be able to do what is required on your behalf.
Thirdly, no worthwhile benefit can come from delaying registration of a Power of Attorney with the Office of the Public Guardian once you have signed the deed.
You should only appoint an attorney you trust to act in your best interests.
How we can help
If you have any questions about any matter arising from this article or about our Power of Attorney/Guardianship services, generally, feel free to get in touch with us. All initial enquiries are at no charge and without obligation to take matters further.
Links you might like
The following articles on this website are relevant to issues to do with power of attorney (and the related topic of guardianship) and you may find it helpful to refer to these if you are considering whether or not to grant a power of attorney.