Power of Attorney. There are three types of Powers of Attorney to use:
- A General Power of Attorney (GPA)
- A Lasting Power of Attorney (LPA) for Property and Financial Affairs
- A Lasting Power of Attorney (LPA) for Health and Welfare
The difference between a GPA and a LPA, is that a GPA is much simpler, and gives a broader use for particular times or events. GPAs are only used for financial matters, for example, if you are going to be out of the country, you could grant your spouse a GPA.
LPAs are more complicated and they allow the Attorney (person receiving the power) to make decisions for the Donor (person giving the power) when they are not able to do so because of mental incapacity. There are more formalities to comply with and with a GPA, it would automatically be revoked if the Donor became mentally incapable.
LPAs for Property and Financial Affairs allow the Attorney to deal with all property and financial matters on behalf of the Donor. These could be such things as buying and selling property, handling bank accounts and investments, dealing with any businesses and healthcare payment matters.
LPAs for Health and Welfare allow the Attorney to deal with social and healthcare matters such as where you live, how you are cared for, and what healthcare you get.
An LPA must be registered with the Office of Public Guardian and it may only come into effect if you are not capable of making decisions for yourself.
A LPA has to have confirmation that the Donor understands the LPA in full and is not under any outside influence in issuing it. A certificate, completed by an independent person must be provided
Anybody the Donor nominates may be notified of the registration of the LPA (limited to 5 people). If nobody can be notified then the Donor must have two certificate providers.
A LPA is not legal until registered with the Public Guardians Office. Registration may take place at any time, for example, before the Donor loses mental capacity or when the Attorney believes the Donor to have lost mental capacity. Upon registration, the Donor can continue to make decisions as long as they are of sound mind.
Cancelling a LPA or revoking a LPA can be done by the Donor as long as they have the mental capacity to understand what they are doing. Dissolution or annulment of a marriage or civil partnership will automatically revoke the power.
If the Attorney or the Donor is declared bankrupt, a LPA for Property and Financial Affairs is automatically revoked, but bankruptcy will not end a LPA for Health and Welfare.
A GPA gives the Attorney power to act on the Donor’s behalf regarding property or affairs, except for making a Will, gifting in a will or acting as a personal representative/administrator or trustee of a will. It is extremely important to nominate an Attorney that you trust implicitly – as the Donor, you are liable for the actions of the Attorney you appoint.
A GPA becomes effective immediately. It remains in place unless the Donor cancels it. If the Donor becomes mentally incapable, the GPA is revoked. Death or bankruptcy of either the Attorney or Issuer would automatically revoke the GPA also.
A GPA does not allow any restrictions on the Attorney’s powers. This differs from a LPA.