POWERS OF ATTORNEY

There are ways to overcome these problems

Where there is a married couple and one becomes incapacitated, the other can usually keep operating the Bank and Building Society accounts, provided that those accounts are in joint names in the first place, with either spouse being able to sign cheques and withdrawal forms. The able spouse will not however be able to sell the house, or sign a Tax Return, or any papers relating to Stock Exchange investments. The position becomes even worse if at any time the able spouse in due course also becomes incapacitated.

The formal way out of this deadlock is for the family to apply to the Office of Public Guardian for the appointment of someone to look after the affairs of an incapacitated person or couple. That someone is called a Guardian (previously a Curator bonis) and this is nearly always either a lawyer or an accountant. The Curator has to administer carefully the affairs of the incapacitated person, under the supervision of the Public Guardian. The process is lengthy and very expensive and it is recommended that this be avoided wherever possible. In the case of stalemate, it is unfortunately the only way to proceed. But it is possible to avoid that stalemate by planning ahead.

There is indeed one simple solution to all these problems !

The solution is to grant a Power of Attorney. A Power of Attorney made in Scotland now falls under the auspices of the Adults with Incapacity Act 2000. This requires that the granter was of sound mind at the time of granting the Power, that he or she knows what a Power of Attorney is and is under no duress to grant one to his or her nominated Attorneys. Once granted, the Power of attorney can last until the granter's death.

The Power can cover not only financial and administrative issues, but some tax planning opportunities and particularly welfare issues, enabling the Attorney to take an active part in ensuring the future care for and well-being of the granter. In acting for the granter, an Attorney must act only to the minimum extent necessary and always in the granter's best interests.

The Attorney is usually a member of the immediate family, or a lawyer, or both. The choice may link in with your choice of Executors in your Will and should of course take account of geography. There is less merit, if you live here, in appointing your daughter in Devon to act as your Attorney, than appointing a good friend, neighbour or lawyer, who is on the spot, where the help is needed.

Whoever you appoint should be one or more people whose judgement you can trust to act reasonably, who understand your situation and can take financial and welfare decisions on your behalf and are people who are likely, on the law of averages, to outlive you.
You can have one person as your Attorney or two (or more) who act jointly or individually; or you can appoint one person, whom failing another. It is usually recommended to appoint at least two people to act as your Attorneys, either one being able to act at the same time, so as to be able to look ahead to the future.

If your Attorney is a lawyer and requires to manage your affairs for you, he will charge an annual fee for doing so. This should always be reasonable for the work involved. This may in many cases be preferable to your expecting a friend or member of your family to do it all free of charge, possibly from some distance and with all the responsibilities both to you and to the other members of your family that such financial management involves.

The Power of Attorney itself is a relatively simple document. It states who are to be appointed as your Continuing and Welfare Attorneys. It confirms that they remain so unless you recall their appointment in writing at any time. It grants a relatively standard list of clauses which cover, for instance, operating Bank accounts, dealing with Income Tax Returns, attending to investments and insurance policies, looking after property and businesses, looking after welfare issues and the like and generally providing your Attorneys with sufficient flexibility to administer any matter which might reasonably be required. After all, it is not possible today to know what might need to be done by them on your behalf in the future.

Once made, a Power of Attorney does not need to come into operation immediately. Sometimes, perhaps as a result of a mild stroke or whatever, it has to. In that event, the Attorney or Attorneys are briefed and become involved straightaway. More commonly, the Power of Attorney, once made, is simply stored away safely - we have a great many unused ones in our Strongroom, many of which we hope will never have to be used - unless or until the need arises. You do have to tell your Attorneys now of your having named them in a new Power, because they will have to sign a form consenting to the registration of the Power of attorney at the Office of the Public Guardian.

We also keep a list on our computer of all Powers of Attorney in existence on behalf of clients so that we can access that basic information - as to whether or not a Power of Attorney exists - as soon as a member of the family or local Doctor telephones us.

Even where a Power of Attorney comes into effect, it can be on a temporary basis only, for example whilst the granter recovers from a major operation, then falling into abeyance when the granter is once more able to look after his or her affairs.

The procedure for an Attorney to act is also very simple. The Attorney can sign his or her own name and then state that he or she is your Attorney.

A Power of Attorney comes to an end when the granter dies, or whenever the granter withdraws the Power, which can be done by a simple letter of withdrawal delivered to the Attorney at any time.

A Power of Attorney under the increased bureaucracy of the Adults with Incapacity Act can be quite expensive. However, because we wish to encourage people to grant Powers of Attorney, as a proper part of looking after their affairs for the future, we offer Powers of Attorney for £152.50 for one person, or £246.25 for two, inclusive of VAT and the £35 registration fee per Power of Attorney payable to the Office of Public Guardian.

This cost can be considered as the one-off premium for a potentially important insurance policy. The insurance policy is the Power of Attorney itself. You are insuring against deadlock and are ensuring that you nominate those you would wish to look after your finances and welfare if at any time you were unable to do so yourself. One never knows when the Power of Attorney may be needed and, as often as not, it will be needed when it could be too late for you to grant one, so it is well to have one signed and put to one side, just in case.

If you ask "When should I draw up a Power of Attorney?", the answer has to be "Now". If you are writing a Will, or you own your house, or have Bank and Building Society accounts or stock exchange investments in your own name, or indeed any other financial matters which could not be dealt with other than by you with your own signature, then it must make sense for you to sign a Power of Attorney now, even if it is then simply stored away in your lawyer's Strongroom meantime. After all, like any insurance policy, you cannot know when the need might arise and, if you wait until then, it may be too late.

As a matter of practice, whenever anyone comes into our Office to talk about tax planning and/or a Will, we mention two other matters to them at the same time, as options to consider too. The first is a Living Will - to authorise family members to consent to having a life support machine turned off to enable you to die with dignity. The second is a Power of Attorney - because it is not enough to provide properly for your death, but also for your life.