Powers of Attorney: Planning for the Future

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1 Powers of Attorney: Planning for the Future A Guide Legal Services Agency Limited 3rd Floor Fleming House 134 Renfrew Street Glasgow G3 6ST (Telephone: ) Legal Services Agency Limited 3rd Floor Princes House 5 Shandwick Place Edinburgh EH2 4RG (Telephone: )

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3 Introduction This leaflet provides general information about Powers of Attorney and their relevance to people suffering from mental illness, brain injury or dementia and those who care for them. This information is not intended to be a full statement of the law and is not a substitute for proper legal advice. Some solicitors, including Legal Services Agency s solicitors, are able to give more detailed advice on this topic. All or some of the costs of the advice may be met by the Legal Aid Advice & Assistance Scheme. What is a Power of Attorney? A Power of Attorney is a legal document whereby one person, known as the Grantor, appoints another person, known as the Attorney, to make decisions and act for them either now or in the future. Generally these responsibilities relate to property and financial affairs. However, since the introduction of the Adults with Incapacity (Scotland) Act 2000, a Power of Attorney can also cover matters relating to the Grantor s welfare. A Power of Attorney granted in terms of this Act is known as a Continuing Power of Attorney when it deals with property and financial affairs, and is known as a Welfare Power of Attorney when it deals with welfare issues. The Power of Attorney document can contain either, or both, continuing and welfare powers. Who may grant a Power of Attorney? Any individual who has capacity to do so can grant a Power of Attorney. He/she would generally be over 16 years of age. One of the most important principles of a Power of Attorney is that the Grantor must have full legal capacity to grant the Power of Attorney. That means the Grantor must be capable of giving instructions in relation to the proposed Power of Attorney and must understand the nature and extent of the powers that are being granted. A certificate must accompany the Power of Attorney confirming that the Grantor fully understands what is involved. It may be appropriate to obtain legal advice when considering granting a Power of Attorney and a solicitor can advise those considering this step.

4 Who may be an Attorney? Any person over 16 years of age who has capacity to do so can be an Attorney. Bankrupt individuals cannot become Financial Attorneys since Continuing Powers of Attorney often deal with a variety of finances and bank accounts. Welfare Powers of Attorney, on the other hand, deal with welfare issues, which might include decisions about where the Grantor is to live. It is possible to appoint an organisation as an Attorney but this applies only to Continuing Powers of Attorney. It is also possible to appoint more than one Attorney. Grantors can also appoint Substitute Attorneys in the event that the designated Attorney is no longer able to act for the Grantor. Anyone considering granting a Power of Attorney should think very carefully about the general character, availability and trustworthiness of the proposed Attorney. What are the duties of the Attorney? The Attorney s powers cover only those matters expressly authorised by the Grantor in the Power of Attorney document. Under the Adults with Incapacity (Scotland) Act 2000 the Attorney is also obliged to comply with the six principles summarised below: There should be no intervention in the affairs of the Grantor unless the Attorney is satisfied that the intervention will benefit the Grantor and that such benefit cannot reasonably be achieved without the intervention. The intervention must be the least restrictive option in relation to the freedom of the Grantor whilst still being consistent with the purpose of the intervention. The Attorney is obliged to take into account the present and past wishes and feelings of the Grantor so far as they can be ascertained by any means of communication. The Attorney must take into account the views of the nearest relative and primary carer of the Grantor, insofar as it is reasonable and practical to do so. The Attorney must take into account the views of any other person appearing to the Attorney to have an interest in the welfare or financial affairs of the Grantor, insofar as is it reasonable and practical to do so. The Attorney must, insofar as it is reasonable and practical to do so, encourage the Grantor to exercise any skills he or she has concerning their property, financial affairs or personal welfare and to develop new such skills. These principles are set out in law and the Attorney is under a legal obligation to comply with them.

5 In addition the Attorney must keep records of the exercise of their powers. A Financial Attorney must also account to the Grantor. If necessary the Sheriff can require a Financial Attorney to be subject to supervision by the Public Guardian and/ or to submit accounts to the Public Guardian. The Public Guardian is a civil servant based in Falkirk who has certain duties and responsibilities under the Adults with Incapacity (Scotland) Act The Sheriff can also require a Welfare Attorney to be subject to supervision by the local authority and/or to report to the Sheriff on the exercise of his or her powers as Welfare Attorney. The Attorney is under an obligation to notify the Public Guardian (and the local authority and the Mental Welfare Commission if they are a Welfare Attorney) if there is a change of address of the Grantor, or if the Grantor dies, or if there is any other event which results in the termination of the Power of Attorney. If the Attorney wants to resign he or she must give written notice of the intention to do so to the Grantor and the Public Guardian, any Financial or Welfare Guardian appointed by the court, or the Grantor s primary carer and the local authority in the case of a Welfare Power of Attorney. The Attorney is not allowed to misuse the Power of Attorney e.g. spend the Grantor s money in ways not authorised by the Power of Attorney document or in ways which will not benefit the Grantor. Misuse of a Continuing Power of Attorney may, in some circumstances, amount to a criminal offence. When is a Power of Attorney helpful or necessary? There are many different situations when a Power of Attorney is useful and anybody with full legal capacity can grant either a Continuing or Welfare Power of Attorney in order to prepare for a time when they may be unable to make decisions for themselves. For example when a person suffers from a mental disorder they may be unable to look after themselves or take decisions about their finances and/or their welfare. Sometimes a mentally ill person may lose the legal ability to make binding legal agreements and decisions about their finances and welfare. If that person has granted a Power of Attorney before losing capacity, the appointed Attorney will have the authority to act for him/her. This can be of particular benefit when a person is diagnosed with a progressive illness such as Dementia or Huntington s disease. In this case, if an individual is diagnosed early and grants a Power of Attorney, whilst he or she has capacity to do so, the Attorney can exercise the Powers granted when it becomes necessary to do so. A Power of Attorney is also useful for people suffering from a mental illness with intermittent symptoms to cover those periods of time when they are unable to manage their financial or welfare affairs.

6 Are there other legal arrangements available to deal with these circumstances? Scots law does have other provisions to enable one person to legally act on behalf of another who lacks capacity to act for himself or herself due to mental disorder, learning disability or inability to communicate. If a person has lost the capacity to make decisions, the following measures can be put in place: (i) The Appointee Scheme Under the Benefits System, if somebody loses capacity to manage their benefits, a family member or a friend can apply to the Benefits Agency to be the specified person to deal with that person s social security benefits or state retirement pension. (ii) Authority to Intromit with Funds If an adult loses capacity to manage a bank account, any individual or body can apply to the Public Guardian under the Adults with Incapacity (Scotland) Act 2000 for authority to access the adult s funds. With the Public Guardian s authority, the individual or body can access funds held on behalf of the adult and use these funds in ways which will benefit the adult and which are authorised by the Public Guardian. They may also be authorised to open a new account in the adult s name, to transfer funds among accounts or to set up payments by Direct Debit or Standing Order. (iii) Appointment of a Welfare or Financial Guardian Under the Adults with Incapacity (Scotland) Act 2000, anybody with an interest can apply to the Sheriff to be appointed as Guardian with power to manage the finances and/or make decisions about the welfare of an adult with incapacity. Such an application is only appropriate when the adult lacks capacity to make relevant decisions about welfare or financial issues. In certain cases a sheriff can also grant an Intervention Order to authorise specific action to be taken on behalf of the adult with incapacity or to authorise somebody to make a specific decision on the adult s behalf.

7 What are the advantages of a Power of Attorney? The chief advantage of a Power of Attorney is that it can be tailored to suit the individual requirements of the Grantor. It gives the Grantor choice as to who will make decisions and an element of control about arrangements for the future by delegating responsibility to a person who is known and trusted. Another major benefit of a Power of Attorney is that, unlike the other arrangements discussed (with the exception of the Appointee under the benefits system), it is not necessary to obtain the authority of the Court or the Public Guardian. Powers of Attorney are relatively informal. They are quick and easy to arrange. They are also relatively cheap and Legal Aid Advice & Assistance is available to those who qualify. A Power of Attorney, once registered with the Public Guardian, is accepted as proof by a third party e.g. a bank manager, that the Attorney has the authority of the Grantor to act on the Grantor s behalf. When does a Power of Attorney end? A Power of Attorney ceases to have legal effect if one or more of the following happens: when the Grantor decides to end it. As long as they retain capacity, the Grantor can revoke the Power of Attorney at any time by giving a written revocation notice to the Public Guardian. The notice must be signed by the Grantor and must incorporate a certificate by a practising solicitor or other member of a specified group; if the Grantor and the Attorney are married or in a civil partnership and they legally separate or divorce, (unless the Power of Attorney document states otherwise); when there is formal resignation of the Attorney, (and there is no Joint or Substitute Attorney who is prepared to continue to act as Attorney); on the bankruptcy of the Grantor or Attorney (only for Continuing Powers of Attorney); on the mental incapacity of the Attorney (and there is no Joint or Substitute Attorney who is prepared to continue to act as Attorney); with the appointment of a Guardian under the Adults with Incapacity (Scotland) Act 2000 with powers which where previously granted to the Attorney; upon the death of the Grantor or the death of the Attorney (and there is no Joint or Substitute Attorney who is prepared to continue to act as Attorney); the decision of a Sheriff to revoke the appointment of an Attorney.

8 Is there any legal supervision of a Power of Attorney? The Public Guardian s Office will consider and investigate any complaints against Financial Attorneys and may make enquiries to ensure that the Attorney is acting in the Grantor s interest. The Public Guardian is also obliged to keep a register of all Powers of Attorney granted on or after 2nd April Welfare Powers of Attorney can, in certain circumstances, be subject to review by the local authority and the Mental Welfare Commission for Scotland, an independent body that protects the rights of individuals with mental disorder, also plays a monitoring role. If necessary the Sheriff can require a Financial Attorney to be subject to supervision by the Public Guardian and/or to submit accounts to the Public Guardian. The Sheriff can also require a Welfare Attorney to be subject to supervision by the local authority and/or to report to the Sheriff on the exercise of his or her powers as Welfare Attorney. What does a Power of Attorney document look like? There is no set format for a Power of Attorney and depending on the Grantor s requirements it can be either a lengthy or fairly short document. Importantly it must detail the scope and extent of all of the powers that the Grantor wishes to delegate to the Attorney. Both Continuing and Welfare Powers of Attorney must be in the form of a written document, signed by the Grantor. A Power of Attorney must also incorporate a statement expressing the Grantor s intention that the powers conferred upon the Attorney will continue in the event that the Grantor loses capacity. If this statement is not included, the Power of Attorney ceases to have effect when the Grantor does lose capacity. The document must also incorporate a formal certificate that has been signed by either a solicitor, an advocate or a registered medical practitioner. This certificate must confirm that the Grantor has legal capacity to grant the Powers of Attorney and that no undue influence is being exercised on him/her. Finally, if it is intended that the Power of Attorney should only be exercisable after the Grantor becomes incapable, the document must state that the Grantor has considered how the determination of incapacity is to be made.

9 What s the next step? The Power of Attorney with the accompanying certificate is sent to the Public Guardian for registration together with a formal application that must be signed by the Attorney signifying the Attorney s willingness to act as Attorney. A registration fee is also paid (at time of printing 70). The Public Guardian will then register the Power of Attorney in the Public Register. The Power of Attorney cannot be used until it has been registered with the Public Guardian. If the Public Guardian is satisfied that the Power of Attorney documentation is in order, a Certificate of Registration will be issued and a copy of the Power of Attorney and the Certificate of Registration sent to the sender and a copy to the Grantor. In the case of a Welfare Power of Attorney, the Public Guardian will also notify the relevant Local Authority and the Mental Welfare Commission for Scotland of the registration, and will provide them with a copy of the document, should they request one. The Public Guardian will also send a copy of the Power of Attorney to up to two named individuals or parties when required to do so by the terms of the Power of Attorney.

10 Where can I get further advice? Some solicitors, including Legal Services Agency s solicitors give advice in relation to Powers of Attorney. Legal Aid Advice & Assistance may be available. Also the following organisations may provide help: Legal Services Agency Limited 3rd Floor Fleming House 134 Renfrew Street Glasgow G3 6ST (Telephone: ) Legal Services Agency Limited 3rd Floor Princes House 5 Shandwick Place Edinburgh EH2 4RG (Telephone: ) Office of the Public Guardian, Hadrian House Callendar Business Park Callendar Road Falkirk FK1 1XR Tel: The Law Society of Scotland, 26 Drumsheugh Gardens, Edinburgh Tel: The Mental Welfare Commission for Scotland, Thistle House, 91 Haymarket Terrace, Edinburgh, EH12 5HE Tel:

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12 About Legal Services Agency Legal Services Agency Ltd is one of Scotland s leading law centres. It operates two Mental Health Legal Representation Projects, one in Glasgow and one in Edinburgh. Legal Services Agency s legal work is undertaken by a team of solicitors in the firm of Brown & Co. who give confidential advice on all aspects of the law relating to mental illness, brain injury and dementia. Initial advice is free. This service is open to all residents of Argyll & Bute, East Ayrshire, East Dunbartonshire, East Renfrewshire, City of Glasgow, Inverclyde, North Ayrshire, North Lanarkshire, Renfrewshire, South Ayrshire, South Lanarkshire, West Dumbartonshire, East Lothian, City of Edinburgh, Midlothian and West Lothian Councils. Legal Services Agency Limited 3rd Floor Fleming House 134 Renfrew Street Glasgow G3 6ST (Telephone: ) Legal Services Agency Limited 3rd Floor Princes House 5 Shandwick Place Edinburgh EH2 4RG (Telephone: ) Legal Services Agency Ltd is a charity (Registered Charity Number: SCO17160) and a Company limited by guarantee (Registered Office: Fleming House, 134 Renfrew Street, Glasgow, G3 6ST. Registered in Scotland, No ) Legal Services Agency 2011 January 2011