Powers of Attorney

None of us likes to contemplate the prospect of our mental faculties failing, either as we grow older or following an accident or illness. However, despite increasing life-expectancies and advances in medical science, there is little that can be done to preserve our mental acuity. It is quite possible to be an active healthy individual one day and, as a result of a sudden unexpected stroke or accident, be both physically and mentally incapacitated the next.

Financial Guardians

In such circumstances, and to enable your financial affairs to be dealt with, your family may be forced to take the lengthy and expensive steps involved in having a Financial Guardian appointed by the Court. By this stage it is often too late to take the much less stressful, quicker, cheaper and easier step of granting a Continuing Power of Attorney. Indeed, one of the most common reasons for making a Power of Attorney is to avoid the risk of having to make an expensive and bureaucratic Financial Guardianship application in the future. Setting up a Financial Guardianship through the Court can easily cost £1,500, and sometimes over twice that amount, as well as often taking 4-6 months to complete.

Protecting your assets

The granting of a Power of Attorney is a precautionary measure; it is not an acknowledgement that mental capacity has been or is being lost. It is more accurately viewed as an extending or sharing of your rights and powers. Indeed, the document may be specifically set up on the basis that it will only come into effect if and when capacity has been lost, and it is of course quite possible that it will never have to be used. The person making the Power of Attorney is called ‘the Granter’ and the person appointed to act is called ‘the Attorney’. For as long as a Granter retains their faculties they will of course retain control and may amend or cancel the power at any time.

As no one can predict the future it is advisable for a Power of Attorney to be widely and flexibly drafted, so that your Attorney will have the necessary powers and authority to do what is required. It is of course fundamental that you have full trust and confidence in your Attorney. If the Welfare powers authorised by the Adults with Incapacity (Scotland) Act 2000 are also incorporated, the Attorney will be able to help to plan medical care for you. Unlike financial powers, Welfare powers will only come into effect once the Granter loses capacity.

Appointing Attorneys

More than one Attorney may be appointed, and this can be advantageous in that it increases flexibility. The appointment can either be 'joint' (ie both of their signatures will be required) or 'joint and several' (ie either one or both together can sign). Joint and several appointments are the most common, as they are particularly flexible. Alternatively, a single Attorney may be appointed but with provision for a substitute Attorney to replace them if the original should ever become unable to act.

Anyone appointed as an Attorney must accept that role by providing written consent. Your solicitor will therefore send a copy of the Power of Attorney to the Attorney with a consent form (called a Registration Form) to sign and return for forwarding to the Office of the Public Guardian.

A certificate by a suitably qualified person (e.g. a solicitor or doctor) must be incorporated within a Power of Attorney, confirming that the Granter understood the nature and extent of the powers granted and that there is no reason to believe that he or she was acting under undue influence when granting the powers.

Registration with the Court

The Court usually takes 30 working days (6 weeks) to deal with the registration of a Power of Attorney, after which the continuing (financial) powers may be exercised by the Attorney, although their welfare powers are not exercisable until the granter loses capacity. In order to confirm registration, the Court will issue a Registration Certificate, which is proof that the attorney has been appointed.

Before a bank or similar institution will accept the signature of an Attorney in place of that of the Granter, it will need to see the copy of the Power of Attorney and Registration Certificate issued by the Court, or alternatively a certified true copy of these documents (i.e. signed by a named Solicitor on every page). In order for the Solicitor acting for the Granter to supply a certified true copy of the Power of Attorney, they will usually require written consent from the granter or, if this is not possible, written confirmation from a medical practitioner that the Granter has become incapable of consenting personally. This is designed to ensure that the interests of the Granter are protected, by ensuring that they are aware of decisions made and steps taken in connection with their affairs.

Accountability of Attorneys

All Powers of Attorney granted after April 2001 must be registered with the Office of the Public Guardian, who is the official responsible for overseeing the actions taken by Attorneys. Attorneys can be asked to account for their dealings and, in appropriate cases, removed. It is therefore important that an attorney keeps accurate and detailed records of how they have dealt with the Granter's money and assets.

Attorneys must act in accordance with certain Principles set out in the Adults with Incapacity (Scotland) Act 2000 and with The Code of Conduct issued by the Scottish Executive in 2001. Any breach may render the Attorney liable in damages to the Granter of the Power of Attorney. 

To discuss any of the issues raised in this briefing, please contact Chris Wallace.

Disclaimer: The information in this publication is based on our current understanding of the law. It has been produced for information purposes only. Professional advice should always be sought before taking any action.

Macleod & MacCallum cannot take any responsibility for loss incurred through acting or failing to act on the basis of anything contained in this publication.