Making a Power of Attorney
Powers of Attorney
A Power of Attorney is a legal way of giving someone else the power to manage your financial affairs when it is difficult for you to manage them yourself, perhaps because of a physical disability. Usually a close relative or friend or solicitor is appointed by you as "attorney". Nobody can "take" power of attorney. It must be willingly "given". The donor chooses who to appoint as attorney, and can cancel the arrangement at any time.
Power of attorney only applies if you are fully aware of the implications of the arrangement. It ends if you become mentally incapable of managing your own affairs.
This page deals with Powers of Attorney for use in England and Wales. If you wish to create a Power of Attorney for use abroad you should contact a lawyer who is qualified in the country involved. If you already have a power of attorney for use abroad please refer to the page about Notarial appointments.
Enduring Power of Attorney
An Enduring Power of Attorney allows you to choose someone to manage your affairs even if you become temporarily or permanently physically or mentally incapable of managing your own affairs e.g. from illness, disability or accident. For an Enduring Power of Attorney to be valid, you must be fully aware of the implications of the arrangement at the time you make it. So, it is too late to consider making an Enduring Power of Attorney if the person concerned is already mentally incapable.
When the donor has lost capacity to manage their affairs, the "attorney" should register the Enduring Power of Attorney so the Court of Protection and its administrative office the Public Guardianship Office can oversee the attorney's actions.
Enduring Powers of Attorney can cover managing shares and selling a property, as well as the day-to-day management of a person's financial affairs.
Since October 2007 it is no longer possible to make an Enduring Power of Attorney. A Lasting Power of Attorney is the name of the new way to achieve the same thing.
Lasting Power of Attorney
Since October 2007 a Lasting Power of Attorney allows you to choose someone to manage your affairs even if you become incapable of managing your own affairs. However, the Lasting Powers of Attorney form is longer and more complicated. Lasting Powers of Attorney are therefore more expensive. The Lasting Power of Attorney also has to be registered with the Office of the Public Guardian before it can be used.
The Court of Protection
If someone becomes mentally incapacitated without first granting an Enduring Power of Attorney, the matter can be taken to the Court of Protection. The court may then allow someone to manage the person's finances for them. This person is known as a "Receiver", and must keep accounts and report to the Office of the Public Guardian. Often this person is a close relative, but the court can appoint other people such as solicitors.
The Court of Protection requires a medical report before an application for receivership can be made and charges an annual fee for supervising the receiver's work.
Receivers are now known as Deputies since the Mental Capacity Act 2005 has come into force.