Should I power up?
Making sure your welfare and finances stay in safe hands whatever happens Financial worries or just looking for better value for money? Consumer champion Fergus Muirhead can help
QI WAS speaking with my bank this week and they were telling me about the importance of sorting out a will. They also said I should arrange a power of attorney. What is that and should I have one set up? I’m 45 and my husband is the same age. We’re both in good health, working, and own our home. Barbara Wolfe
AWe TOUCHeD on powers of attorney a few weeks ago when looking at the costs of care and whether there were trusts that could be set up to help with that. I promised to come back and look at them in more detail. I spoke again to Donna Brennan, a partner at Glasgow solicitor Morton Fraser, and she explained the basics for me. “A power of attorney (POA) is a document given by one individual (known as the grantor) to another person or persons empowering them as attorney to look after the grantor’s affairs. “There are two types of POA. A continuing POA allows the attorney to deal with the grantor’s financial
and property matters. Matters concerning the grantor’s personal welfare would be covered by a welfare POA.
“Often, both types of POA are combined in one document. The document sets out who has been appointed as attorney and what powers they are given.
“The document incorporates a special certificate which must be signed by a solicitor or a doctor, who must be present when the grantor signs the document to ensure the grantor understands its contents.
That’s the legal explanation but what does it all mean in real life? Well, most of us quite rightly want to deal with our own financial and property affairs for as long as possible. But what happens if we are unable, or unwilling, to do so?
Unless the issue has been addressed while we are fit and able, our loved ones may find themselves having to go through a complicated, time-consuming and expensive court procedure to be appointed as guardian.
Powers of attorney need to be set up while the person being represented is able to sign all of the correct documents granting authority to their attorney – they must have “capacity” as the legal people put it.
Donna added: “The powers contained in the legal document can
be as wide or restrictive as you wish. However, it is usually preferable to frame the document as widely as possible, as otherwise if a particular power was to become necessary but was not included in the document, it would be necessary to obtain a court order to obtain the power in question.
“A typical POA document is framed so that the chosen attorney can stand in the grantor’s shoes and exercise as many powers as required to look after the grantor’s interests.
“A grantor should only appoint someone as attorney that they trust to deal with their affairs honestly.”
Setting up a financial and property power of attorney doesn’t stop the person being represented from dealing with their own affairs even after the document has been signed.
Donna said: “POAs can be framed to come into effect only when the grantor loses capacity to deal with their own affairs and only once a doctor has certified this to be the case.
“However, this can be unduly restrictive – for example a grantor may have brief periods of physical disability, where, for example, they are in hospital and while they have not lost capacity to deal with their own affairs, it is inconvenient to do so. For this reason, a grantor may prefer to leave matters open. The document cannot come into effect until it has been signed in the presence of a solicitor or doctor and then registered with the Office of the Public Guardian, a supervisory body which retains a central record of attorneys.”
Welfare powers can only be exercised by the attorney once the grantor has lost capacity to communicate their own views.
So your bank is correct – you should see about setting up a power of attorney as soon as you can. Any solicitor will arrange it and many may do it as part of a deal while dealing with other transactions, such as property purchase.