In general, there are three primary forms of POA:
- Ordinary power of attorney.
- Lasting power of attorney.
- Enduring power of attorney.
In this article, which power of attorney is valid after death in 2023, we take a look at these issues in more depth.
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Are there different types of power of attorney?
There are a number of different powers of attorney, each having their own function and it is possible to have more than one. Deciding which one(s) you may need will be dependent on your own personal circumstances.
What is an Ordinary power of attorney?
An ordinary power of attorney (ordinary POA), sometimes known as a general POA, can provide the attorney broad control over the donor’s estate, or it might be limited to specific transactions or for a specific length of time. It can be utilised for real estate, investments, and financial matters, but not for personal welfare. Ordinary POAs have a narrower scope than lasting or enduring POAs.
An ordinary POA expires if the donor or attorney dies or becomes mentally incapacitated, or if the attorney is declared bankrupt; otherwise, it continues indefinitely.
The document itself will often be a simple one-page paper and a standard POA document can only delegate authority to one attorney. There must be more than one regular POA document if there is more than one attorney.
The Powers of Attorney Act of 1971 specifies standard text for the instrument, but it is not required to be properly registered. An ordinary POA may be considered by an individual if they are going to be away for an extended period of time and want someone to manage their financial affairs during that time.
Ordinary POAs have a narrower scope than lasting or enduring POAs. However, because of the lack of formality, it is still beneficial for short-term needs and when age and capacity are unlikely to be an issue.
What is a Lasting power of attorney (LPA)?
The Mental Capacity Act 2005 established the Lasting Power of Attorney (lasting POA), which went into force in October 2007.
There are two kinds of lasting POA:
- Health and welfare
- Property and financial affairs
A health and welfare attorney makes – or assists the donor in making – decisions regarding daily routine, medical treatment, and even where the donor dwells.
There is a section in the LPA application form that permits any limitations on the attorney’s abilities to be specified. For example, the donor can authorise their attorney(s) to act immediately after registering the lasting POA, or they can limit its use until they lose capacity.
If the donor still has mental capacity, they can amend a lasting POA by contacting the OPG and presenting appropriate evidence. If the donor wished to add another attorney, they would need to terminate the lasting POA and create a new one while they still had capacity.
To terminate a lasting POA, the donor must deliver the original document to the OPG together with a revocation deed.
If an attorney dies, loses mental ability, or becomes bankrupt while serving as a property and financial affairs attorney and there are no substitute attorneys, a lasting POA will immediately terminate.
If the donor dies, the power granted by their LPA, or LPAs, automatically ceases. This means that if you have been acting as an Attorney under that LPA, you will no longer have the authority to manage the late donor’s affairs.
What is an Enduring power of attorney (EPA)?
Since October 1, 2007, it has been impossible to create a new enduring POA, albeit those created and signed prior to that date may still be used. While the donor is mentally capable, an enduring POA functions similarly to a regular POA.
Again, enduring POAs do not extend to personal welfare, therefore if the donor still has capacity, they may want to consider drafting a lasting POA for health and welfare.
When the donor loses mental capacity, the enduring POA can still be used, but only if the attorney has registered it with the OPG. Until the donor’s affairs are registered, the attorney is not authorised to manage them.
Enduring POAs registered before to October 2007 will bear the stamps of the Court of Protection and the Public Guardianship Office, as well as the date of registration. The forerunner of the OPG is the Public Guardianship Office. Enduring POAs created after October 2007 will bear the OPG’s mark
Provided the enduring POA has not been registered, it may still be used if the donor retains mental capacity and there are no limitations on the attorney’s rights – for example, there is no wording stating that the powers become effective only if the donor becomes mentally unable.
If the donor’s mental capacity is proven to be lost, an enduring POA cannot be used until it is registered. If the donor dies, the enduring power of attorney comes to an end automatically.
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Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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