Power of Attorney
It is an unfortunate fact that as some people grow older the management of their financial affairs can become increasingly difficult. In situations where they are frail, ill or too confused to handle their own financial affairs, it may be necessary for an individual to grant a friend or a relative 'Power of Attorney' to act on their behalf.
What is a Power of Attorney?
A Power of Attorney is a legal document that gives another person or persons the right to act on your behalf for a limited time or for an indefinite period.
From October 2007, the standard document for appointing attorneys is known as a Lasting Power of Attorney (LPA). An LPA must be registered with either the Court of Protection or the Office of the Public Guardian to give any authority. There are two types of LPA:
| 1. Property and Affairs LPA |
A registered Property and Affairs LPA allows the person who is granted the LPA (the ‘attorney’) to make decisions affecting the person the LPA covers’ (the donor) financial circumstances, including pension arrangements. |
| 2. Personal Welfare LPA |
A registered Personal Welfare LPA allows the attorney to make decisions affecting the donor’s welfare. This is designed for authorizing medical treatment and for determining where the donor will live in the event that significant levels of care are required.
An LPA may give full or restricted powers, (e.g. the power to operate a bank account, but not to sell the donor's home). |
Before October 2007 the standard document for appointing attorneys was known as an Enduring Power of Attorney (EPA). An individual appointed as an attorney through an EPA may use that power immediately, or the person granting the EPA can specify that the EPA is only to become effective should they become unable to manage their affairs in the future. The EPA may give full or restricted powers, (e.g. the power to operate a bank account, but not to sell the donor's home). If an EPA was completed before October 2007 it can still be used and may still be registered with either the Court of Protection or the Office of the Public Guardian.
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A Power of Attorney may be granted to anyone over the age of 18. Ideally it should be somebody who can be trusted implicitly such as a close friend or family member. Alternatively, a professional attorney could be appointed and many solicitors offer this service. A Property and Affairs LPA must not be granted to anyone who is declared bankrupt.
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No. Assuming that the donor remains mentally capable, an LPA or EPA may be cancelled or varied at any time. An important point to note is that, on its own, an EPA is only valid whilst the donor remains mentally capable. At the point when the person appointed as attorney believes that the donor is becoming mentally incapable, they must register their EPA with the Court of Protection or the Office of the Public Guardian in order for it to remain valid.
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The Court of Protection is the public office responsible for ensuring that Powers of Attorney are not misused and can call on attorneys to account for their dealings at any time. The Court of Protection may be contacted at any time by members of the public who believe that an attorney may not be acting in a donor's best interests.
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The Office of the Public Guardian is an agency of the Ministry of Justice that is responsible for the registering of an LPA, EPA and supervising individuals appointed by the Court of Protection.
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A Power of Attorney may be arranged through a solicitor. This is advisable if a person requires any advice regarding the procedure, or if they have a significant amount of money or property. However, suitable forms to establish Powers of Attorney can be obtained from the Office of the Public Guardian..
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If no Power of Attorney exists and a person becomes mentally incapable, the Court of Protection will appoint a Receiver to act on their behalf. A person's relatives or friends are free to make a formal application to become a Receiver, however as no Power of Attorney was arranged, the Court of Protection will continue to have a close involvement with the Receiver's activities, and will charge the individual's estate an annual fee for this. If no one applies to become a Receiver, the Court of Protection may appoint a public receiver, e.g. a Local Authority.
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The ZF UK Pension Plan is very careful not to disclose personal information about members to third parties. However, some members do ask us to liaise with a person to whom they have granted Power of Attorney. In such circumstances we will correspond with the member's attorney but will only carry out certain activities depending on the power that they have been granted. Before any activities are carried out the Plan will require sight of the original Power of Attorney document. Where a request has been received to change the bank account details into which a pension is paid, the Plan will only accept a Property and Affairs LPA or an EPA that has been registered. Please note that the Plan will only make payment of a member’s pension into a bank account that is held in the member’s name. The Plan will require evidence that this is the case.
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The Office of the Public Guardian is the administrative arm of the Court of Protection. It produces very detailed and helpful information leaflets about Powers of Attorney and the procedure for applying to become an attorney. These are available on its website at www.publicguardian.gov.uk. Alternatively, you may contact its help line on 0300 456 0300.