The term power of attorney, abbreviated to PoA, is often misunderstood or not used correctly. Here we explain what it means and the types of PoA in the UK.
Power of attorney can be used to refer to the rights that someone is given to act on someone else’s behalf or the type of legal document that gives the rights.
The power can relate to any action the giver of the power has the legal right to do already. For example, it might be to be able to sell a car on behalf of the owner or let a property in the owner’s name. The power could be defined narrowly or broadly.
The attorney is the person or people to whom the power is given. It comes from the French verb atorner, to assign or to give. The noun derived from the verb, atorné (pronounced a-tour-ney), is the person who is given the powers.
A common mistake is to think that the attorney must be a solicitor, since the word is used in the US to mean a lawyer or legal representative. That is not the case. Although there are restrictions on who may be an attorney, legal qualification is not one of them.
The term for the person giving the power is the donor.
Types of power of attorney
Ordinary or general
These are the same. The words are only used to differentiate this standard type from the other types, and have only come into use since the other types were introduced in 1985.
Under this type, any right to act can be transferred to someone else. The duration of the power is typically capped, and the power itself is usually narrowly defined. For example, someone travelling abroad for a month may give ordinary PoA to a relative to be able to conduct banking for a particular bank account on his or her behalf while he or she is away.
A PoA is often used for real property sales or lettings, where the owner or landlord is not in the same country during the sale or letting process, and so he asks and legally empowers someone else to act on his or her behalf.
This is not the same as an agency relationship, where another party acts in goodwill for his or her client. The attorney stands in as the donor.
Lasting Power of Attorney, known as LPA or LPoA, is a specific form of PoA, created by the Mental Capacity Act 2005, which came into force in October 2007. They exist in England and Wales only.
The word lasting refers to the characteristic that the power remains in place after the donor loses mental capacity.
There are two types of LPA. Both are limited in scope. One gives powers relating to financial matters, the other to health and care. The reason for having two types is that the donor may wish to nominate different attorneys for different purposes.
The Office of the Public Guardian (the OPG) administers the LPA system, registering the documents and investigating breaches of power.
An ordinary PoA does not need to be registered and is legally binding once the donor signs it. The powers are transferred on the date of signature, or at a later date given in the document.
In contrast, an LPA only becomes legally binding once registered after signing, and powers are only given when the donor loses mental capacity (note that a donor may opt for a financial affairs LPA to be used as an ordinary LPA once registered but before mental capacity is lost in order to allow attorneys to help with care).
In England and Wales, this type, also known as an EPA, was replaced by the LPA system. Just like LPAs, it allowed attorneys to manage the affairs of a donor who has lost mental capacity.
However, it is limited in scope, giving the attorney limited powers to dispose of property, make usual gifts and buy small items. It does not give any power to make decisions about health or care.
No new EPAs can be created. Ones signed before October 2007 and can still be registered with the Office of the Public Guardian (at which point power is given if the donor has lost mental capacity).
An EPA, unlike an LPA, can be used as an ordinary PoA (i.e. without the need to be registered) if the donor has mental capacity.
Continuing, Wefare and Combined
In Scotland, there are three types of power of attorney that are specifically used for giving power to someone else when mental capacity is lost. These are the Continuing PoA and the Wefare PoA, which when drafted together form a Combined PoA.
Unlike for LPAs, there is no set form to use for these PoAs although there are certain sections that are needed. These are similar to the sections in an LPA, including a certificate provided by a solicitor or medical practitioner.
Scottish PoAs also need to be registered, with the Office of the Public Guardian (Scotland).
Making a power of attorney
Net Lawman provides templates to make ordinary power of attorney documents, for any use.
In partnership with Unforgettable.org we also offer a number of services that allow you to make and register both types of Lasting Power of Attorney. The online LPA service is free to use.