Any individual may give another a power of attorney to manage his or her affairs pursuant to the Personal Protection of Property Rights Act 1988 (“the Act”).
The Act provides for two types of powers of attorney:
- An Enduring Power Of Attorney As To Property
This confers upon the person who is appointed (“the donee”) the right to act in respect of all the property affairs of the person he or she is appointed by (“the donor”). Alternatively, it can be restricted to certain types of property. For example, a person who is intending to be absent from the country may wish to appoint an attorney to negotiate the sale of a specific asset such as a house or company shares and the power of attorney would therefore be restricted to those assets only.
- An Enduring Power Of Attorney In Relation To Personal Care and Welfare
This confers upon the donee the right to make decisions concerning the personal care and welfare of the donor of the power of attorney. It can be particularly useful in the case of elderly people who wish to appoint family members to make decisions concerning the sort of care they should receive.
However, there are certain matters which are specifically excluded. For example, the donee cannot refuse consent on behalf of the donor to any standard medical treatment or procedure intended to save life or prevent serious damage to health.
In both instances, the donor may stipulate that the power of attorney is not to be revoked even if the donor becomes mentally incapable.
Who Should You Appoint?
Given the wide powers that the donee of a power of attorney can exercise on behalf of the donor, it is most important that if you are considering appointing
an attorney then the proposed person should be someone whom you implicitly trust. You should know them well enough to be confident they will carry out your wishes and generally deal with your property and personal affairs in a manner that you desire.
Only one person can be appointed at any given time as an attorney for personal care and welfare but two or more can be appointed to deal with property. In that instance, you should consider whether they should be appointed jointly (which means both attorneys must act together) or jointly and severally (which means they can act either together or separately).
A power of attorney may be revoked at any time by the donor giving written notice to the donee. However, if you wish to do this it is prudent to inform your bank as well as any other third parties who may have dealt with your attorney. A power of attorney is also revoked on the death of the donor.
A power of attorney can only be used for a property owned by the donor in their personal capacity. It cannot be used to deal with property in which the donor has an interest in another capacity, for example as a trustee of a trust. Furthermore, it can not be used to authorise the donee to act on the donor’s behalf in his or her capacity as a director of a company.
Do You Need A Power Of Attorney?
A power of attorney is useful particularly if you are travelling or living overseas and wish to ensure there is someone available to deal with your affairs in your absence. It is also useful in case of illness or mental incapacity.
However, before appointing an attorney, careful consideration should be given as to whether it is appropriate to give the donee general power to act on your behalf or restrict it to specific matters only.
The appointment of an attorney is an important step and you should always seek advice from your solicitor before signing a power of attorney.
