Understanding the different types of power of attorney
- List the three main types of power of attorney and how they differ.
- Describe how the system works in Scotland and Northern Ireland.
- Identify what a trustee POA is and what to do if no POA is in place.
- List the three main types of power of attorney and how they differ.
- Describe how the system works in Scotland and Northern Ireland.
- Identify what a trustee POA is and what to do if no POA is in place.
A power of attorney (POA) is a legal document by which one person (the ‘donor’) gives another person (the ‘attorney’) the power to act on their behalf.
A POA can be used in respect of financial, personal and welfare matters.
Types of POA
Generally speaking, there are three main types of POA:
- Ordinary power of attorney
- Lasting power of attorney
- Enduring power of attorney
Ordinary POA
An ordinary power of attorney (ordinary POA), sometimes referred to as a general POA, can provide the attorney with general authority over the donor’s estate, or it can be limited to particular transactions or for a particular period of time.
It can be used for property, investments and financial affairs, but not for personal welfare.
The remit of ordinary POAs is narrower than the lasting or enduring types.An ordinary POA terminates if the donor or attorney dies or becomes mentally incapable, or the attorney is declared bankrupt - otherwise it carries on indefinitely.
In terms of the document itself, it will usually be a simple one-page document.
One ordinary POA document can only grant power to one attorney. If there is more than one attorney, there must be more than one ordinary POA document.
The Powers of Attorney Act 1971 provides standard wording to be used in the document but the document itself does not need to be formally registered.
A client might consider an ordinary POA if they are going travelling for an extended period of time and they want someone to manage their financial affairs during that period.
The remit of ordinary POAs is narrower than the lasting or enduring types. However, the lack of formalities means it is still useful for short term purposes and when age and capacity are unlikely to be an issue.
Lasting power of attorney (post-2007)
The Lasting Power of Attorney (lasting POA) was introduced by the Mental Capacity Act 2005, coming into effect in October 2007.
There are two types of lasting POA:
- Health and welfare, and;
- Property and financial affairs
A health and welfare attorney makes - or helps the donor make - decisions about daily routine, medical care and even where the donor resides.
Making a lasting POA
The Office of the Public Guardian (OPG) provides specific forms that must be used for lasting POAs. These are around 11 to 16 pages in length.
Although you can complete the standard forms yourself (and mostly online), the donor, attorneys, witnesses and the certificate provider must sign them.
Many people use a family solicitor to help them with the process and with completing the forms.
