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The power of one

08 October 2015

There are important points to be aware of before taking on the role of a power of attorney.

Sophie Gough, a business development administrator working at St. James’s Place in Cirencester, was recently asked by her parents to be their ‘attorney’ under a lasting power of attorney (LPA). She realised that she didn’t know quite as much as she should about what would be expected of her, and so she was determined to brief herself fully.

“The first thing you have to do is to familiarise yourself with exactly what powers you will be acting under and what, if any, restrictions are included,” she says. There are two distinct types of LPA: firstly, property and financial affairs; and secondly, health and welfare.

Slightly different arrangements apply in Scotland and Northern Ireland. For example, as well as continuing and welfare powers, Scottish law operates a combined power of attorney that covers both situations.

Keep records

Sophie has been given a property and financial affairs LPA, which awards her the power, if necessary, to manage her parents’ bank accounts, pay their bills, collect their pensions and even sell their home. She would be expected to keep their finances separate from her own and to keep up-to-date records of their accounts. This LPA can be used as soon as it is registered, with the donor’s permission.

A health and welfare LPA, on the other hand, can only be used once the donor is unable to make their own decisions. It gives the attorney power to decide on issues such as their daily routine and medical care, on moving into a care home and whether or not to continue with life-sustaining treatment.

Regardless of the type of lasting power, the attorney should remain sensitive to the donor’s wishes. “An important principle is that, while the attorney is empowered to act on behalf of the donor, they should include them in the decision-making process wherever possible,” Sophie notes.

 

No carte blanche

She points out that, contrary to what some believe, attorneys cannot simply make any decision they wish to. “Either LPA can stipulate exactly what decisions can be made,” she says. “Restrictions can come in a variety of shapes and sizes, ranging from not being able to sell a family portrait, to only being able to make specific decisions jointly with another attorney.” Any attorney can be investigated by the Office of the Public Guardian, so all of their decisions should be well within the scope of the powers set out, even if the attorney is certain that it would be what the donor wanted.

Attorneys can get help and guidance from a number of sources ­– from a financial adviser, a healthcare professional, or the Office of the Public Guardian – on a one-off or regular basis. However, while they can canvass the thoughts and opinions of professionals, they cannot delegate any decisions to them – unless this is provided for in the power of attorney.

As Sophie discovered, attorneys can retire from their duties, if they feel they must. “If circumstances change and an individual simply decides that they are no longer best placed to be an attorney, they will need to contact the Office of the Public Guardian,” she says. “However, they are encouraged to do this as soon as possible, so that the donor can make other arrangements.”

Sophie still has mixed feelings about the LPA. “The thought of making decisions on behalf of my parents, if the time comes, fills me with dread,” she admits. “At the same time, I cannot thank them enough for putting in place something that could make a difficult time in all our lives that little bit easier.”

 

Please note that advice given in relation to a Power of Attorney will involve the referral to a service that is separate and distinct to those offered by St. James's Place and is not regulated by the Financial Conduct Authority.

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