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Power of Attorney
"I need a power of attorney document to appoint my sister as my attorney to manage my financial affairs, including bank accounts and property transactions, while I am abroad for 12 months. The document should be valid immediately and specify a maximum transaction limit of £10,000."
What is a Power of Attorney?
A Power of Attorney lets you give someone else the legal authority to make decisions or take actions on your behalf. This trusted person, called your 'attorney', can handle your financial matters, property dealings, or personal welfare decisions when you need them to.
Under English law, you can create different types of Powers of Attorney. The most common is a Lasting Power of Attorney (LPA), which continues even if you lose mental capacity. You must register an LPA with the Office of the Public Guardian before it becomes valid, and you can cancel it anytime while you still have mental capacity.
When should you use a Power of Attorney?
A Power of Attorney becomes crucial when you need someone to handle your affairs during planned or unexpected situations. Common triggers include extended travel abroad, hospital stays, or managing property transactions while you're unavailable. Business owners often use them to ensure company operations continue smoothly during their absence.
Many people create a Lasting Power of Attorney while they're healthy and mentally capable - it's much harder to set one up after losing capacity through illness or injury. Having this legal safety net in place helps avoid court applications for deputyship, which can be costly and time-consuming for your family.
What are the different types of Power of Attorney?
- Procuration Letter: A simple, short-term power to handle specific tasks like signing documents or completing a single transaction
- Power of Attorney Declaration: A formal statement confirming your intent to grant powers, often used for general financial and property matters
- Power of Attorney Employment Contract: Specifically designed for workplace scenarios, allowing an employee to act on behalf of their employer
Who should typically use a Power of Attorney?
- Donors: The person granting the Power of Attorney, who must be mentally capable when creating it and at least 18 years old
- Attorneys: Trusted individuals chosen to act on the donor's behalf - often family members, close friends, or professional advisers like solicitors
- Solicitors: Legal professionals who draft and certify Powers of Attorney, ensuring they meet legal requirements
- Office of the Public Guardian: The government body that registers and oversees Lasting Powers of Attorney
- Certificate Providers: Independent people who confirm the donor understands the Power of Attorney and isn't being pressured
How do you write a Power of Attorney?
- Personal Details: Gather full names, addresses, and contact information for both donor and attorneys
- Scope Decision: Choose between financial decisions, health and welfare, or both for Lasting Powers of Attorney
- Attorney Selection: Pick trustworthy people who understand your wishes and can manage your affairs effectively
- Preferences List: Write down specific instructions or preferences about how decisions should be made
- Certificate Provider: Identify someone independent who can verify your mental capacity and freedom from pressure
- Registration Planning: Allow time and budget for mandatory registration with the Office of the Public Guardian
What should be included in a Power of Attorney?
- Donor Details: Full legal name, address, and clear statement of intention to create a Power of Attorney
- Attorney Information: Complete details of appointed attorneys and how they can act (jointly or separately)
- Powers Granted: Specific list of authorities being delegated, with any restrictions clearly stated
- Duration Clause: When the powers begin and end, or conditions that trigger or terminate the authority
- Execution Requirements: Signature sections for donor, attorneys, and witnesses, with proper dating
- Certificate Provider Statement: Independent confirmation of the donor's mental capacity and free will
What's the difference between a Power of Attorney and an Agency Agreement?
A Power of Attorney is often confused with an Agency Agreement, but they serve distinct legal purposes. While both involve one party acting for another, their scope and protections differ significantly.
- Legal Authority: A Power of Attorney grants broad legal powers to act in someone's personal affairs, while an Agency Agreement typically creates a limited business relationship for specific commercial purposes
- Duration and Scope: Powers of Attorney can continue after mental incapacity (if properly registered as an LPA), whereas Agency Agreements usually terminate if the principal loses capacity
- Registration Requirements: Lasting Powers of Attorney must be registered with the Office of the Public Guardian, but Agency Agreements don't require official registration
- Personal vs Commercial: Powers of Attorney often deal with personal welfare and financial decisions, while Agency Agreements focus on business transactions and commercial representation
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