Power of attorney

What is a power of attorney?

A power of attorney is an authority that a person (referred to as the donor) gives to another person or company to act on his or her behalf. A power of attorney can be general (for example, to act on all matters on behalf of the donor) or specific or limited (for example, to manage a bank account while the donor is overseas).

There are two types of power of attorney:

ordinary power of attorney
enduring power of attorney

What is an ordinary power of attorney?

An ordinary power of attorney is valid until it is cancelled (revoked), or if it is for a fixed term until that term expires. In addition, an ordinary power of attorney remains valid only while the donor retains what is known as legal capacity (for information see “Incapacity” in this chapter). If the donor loses that capacity (for example, because of a debilitating disease, a serious accident or mental illness) the power of attorney ceases and the attorney cannot validly act. This is because under an ordinary power of attorney the attorney cannot have power greater than that of the donor.

What is an enduring power of attorney?

(Protection of Personal and Property Rights Act 1988, s.96)

An enduring power of attorney (sometimes referred to as an EPA) continues to be valid even if the donor loses his or her legal capacity (for information see “Incapacity” in this chapter). So if the donor loses capacity, the attorney can still act.

There are two types of enduring power of attorney:

Enduring power of attorney for personal care and welfare (for information see “Enduring power of attorney covering personal care and welfare” in this chapter). This can only come into effect upon the donor becoming incapacitated.
Enduring power of attorney for property (for information see “Enduring power of attorney covering property” in this chapter). In this case, the donor can stipulate whether the power becomes effective either before or after the donor becomes incapacitated.

Appointing an enduring attorney

Does the donor need a lawyer to appoint an enduring power of attorney?

The prescribed form for appointing an enduring power of attorney does not require a lawyer to advise the donor or to witness the signing of the form. However, there are a number of advantages for the donor in getting independent legal advice from someone experienced in this area of law.

A lawyer will:

be familiar with the format of the prescribed form
make sure that the donor’s wishes comply with the law and will be enforceable
be able to explain all the provisions
be able to explain any possible disadvantages
have the document witnessed appropriately
ensure that the donor’s wishes, rather than those of the attorney, will be taken into account

What happens if there is a conflict between a personal care and welfare attorney and a property attorney?

(Protection of Personal and Property Rights Act 1988, s.99)

If there are two enduring attorneys, one for personal care and welfare and one for property, and there is a conflict between them in carrying out their respective powers or duties, then personal care and welfare prevails. However, either attorney can apply to the court asking it to direct otherwise.