Powers Of Attorney

A power of attorney is a deed by which one person ("the Donor") grants the attorney ("the Donee") the right to perform certain functions in place of the Donor. Powers of attorney can be useful when the Donor is unable to sign documents or give instructions, for example because he is out of the country or he lacks mental capacity.

There are three basic types of power of attorney, a basic power, an enduring power and a lasting power. Instructions on how to draft a power of attorney are beyond the scope of this article however what follows is a brief explanation of the three different types.

Basic power of attorney

A basic power of attorney does not have to be in any particular form. The only absolute requirements is that it must be executed as a deed which means it must be signed by the Donor whose signature must be witnessed by somebody other than the Donee and it must make clear what powers the Donor wishes to grant to the Donee. A basic power of attorney lasts for 12 months although it can be revoked at any time by the Donor. It will automatically be revoked upon the death or bankruptcy of the Donor or if the Donor loses mental capacity. It can continue to be used after the twelve month period is up however anyone relying on it must obtain specific confirmation that the power has not been revoked and that the Donor intends it to remain valid. Within the initial 12 month period a person who is relying on the power being valid is entitled to do so unless there is evidence to suggest that the power has been revoked.

Enduring power of attorney

This is a form of power of attorney which does not expire. It is still possible for the Donor to revoke the power but otherwise it will remain valid until the death or bankruptcy of the Donor. If the Donor loses mental capacity then the power may be registered with the office of the public guardian. An application to the court of protection may also be required. Until registration the enduring power is invalid where the donor has lost mental capacity.

Enduring powers of attorney have now been replaced by lasting powers of attorney and no new enduring powers can be created though existing ones may still be used. If relying on a copy of the power of attorney, for example when acting for a purchaser where the transfer deed is signed by an attorney on behalf of the seller, the copy must be certified by the Seller's solicitor as being a true copy of the original document and it must be certified on every page of the power.

An enduring power of attorney must be drafted in a form prescribed by statute.

Lasting powers of attorney

The lasting power of attorney has replaced the enduring power. Like the enduring power it must be drafted in a form prescribed by statue. It must also be registered with the office of the public guardian whether or not the Donor lacks mental capacity. Once registered, it can only be revoked by application to the court of protection or upon the death or bankruptcy of the Donor or the bankruptcy of the Donee. If the donor loses mental capacity then he is unable to revoke the power.

What can be done under a power of attorney?

With limited exceptions a Donor can grant a Donee power to do anything which the donor himself is able to do. This includes executing transfer deeds, entering into contracts and even entering into mortgages. A power of attorney cannot be used however to bind a Donor into a credit agreement regulated under the consumer credit act 1974. Although mortgages secured on land are not regulated under that act it is generally considered not to be good conveyancing practice to allow an attorney to sign a mortgage deed. Furthermore, when two people are buying property jointly with the aid of a mortgage it is not permitted for one to appoint the other as his or her attorney.

The power of attorney must specify what the attorney is entitled to do. It may provide a general power for the attorney to perform all the functions of the Donor or it may list specific functions. If the power is lasting or enduring it may appoint two or more attorneys in which case it must specify whether they are entitled to act jointly or jointly and severally. If they are to act jointly only then any documents executed under the power of attorney must be executed by all of the attorneys named in the Power. If they are entitled to act jointly and severally then any documents may be signed by one attorney. However, where a good receipt for capital money is required to overreach a beneficial interest a deed would still need to be signed by one or more attorneys.

Where the power is lasting or enduring the donor may specify in the power an alternative attorney to act in the event that the first appointed attorneys are incapable of acting however non provision allowing the attorneys themselves to appoint an alternative will be valid.

What do I need to look for in a power of attorney?

When relying on a power of attorney it is important to check the following points:

  • Is the power lasting or enduring? If neither, was it granted within the last 12 months?
  • If neither lasting nor enduring and granted more than 12 months ago or do you have specific confirmation from the Donor that the power has not been revoked?
  • Does the power of attorney grant the attorney the rights to do whatever he is proposing to do?
  • If the power is lasting, or if it is enduring and the Donor has lost mental capacity has it been registered with the office of the public guardian?
  • Is the copy of the power certified as being a true copy of the original on every page?
  • Have you checked that the donor is neither bankrupt nor deceased?
  • Where the power requires the attorneys to act jointly, has any document signed by them been signed by all of the attorneys?