Powers of attorney – be careful who you appoint

  • Insight

20 November 2019

Powers of attorney play a valuable role in ensuring that the financial affairs and welfare of an adult, who is no longer capable, continue to be looked after in a way that puts the interests of the adult first. Many people think that, if there comes a time when they are not able to make decisions for themselves, a family member can automatically step in and act on their behalf. The reality is that nobody automatically has the authority to make decisions about your life if you lose capacity unless there is a power of attorney set up in advance.

When appointing an attorney and granting powers to them, you have to be aware that there is a risk that the people who you have put your trust in might not always do as they should.  There are also certain formalities and principles you should be aware of when thinking about a power of attorney.

One of the great successes of The Adults with Incapacity (Scotland) Act 2000 has been increased awareness of powers of attorney.  Having someone of your choosing already in place takes a huge burden off everyone’s shoulders especially if swift action is required.

Prior to 1991, it was unclear whether the power of attorney would cease if the granter became incapable. The Adults with Incapacity (Scotland) Act 2000 brought about two main benefits.  The first is that powers of attorney now do not lapse when the granter becomes incapable. This means that the powers conferred can continue to be used even if the granter himself can’t supervise what is happening. That, of course, is the whole point of continuing powers of attorney.

The second is that more often than not it will be family members who are appointed. This, again, makes sense in that they are more likely to know the circumstances and what is the right thing to do.  And, of course, it keeps costs down. The combination, however, of these two changes opens up a new problem. We are seeing an increase in cases where the attorney has abused the powers they have been granted. Although the Office of the Public Guardian has power to intervene if things are brought to its attention, there is no automatic supervision of the actions of attorneys.

A misplaced sense of moral entitlement

There are examples of where it can go wrong, where an attorney has a misplaced sense of entitlement to inheritance or recompense.

The granter is incapable and in a care home, paying handsomely for their care. Their money is dropping rapidly. The attorney, who will be a beneficiary under the granter’s will, can see their hoped-for inheritance disappear if they don’t do something to prevent it from being spent on care home fees. There can be a misplaced sense of moral entitlement which can cloud their judgement.

In one case a son felt justified in charging his mother £400 a day for visiting her and dealing with her business. In the end his appointment was revoked by the court.

What are the general principles for a power of attorney?

Attorneys always need to remember that any action they take using their powers has to comply with the general principles set out in the Act:

  • Any action taken must have the incapable adult firmly at the centre of the decision-making and be for their benefit.
  • An attorney must not allow their personal interests or prejudices to conflict with their duties towards the granter.
  • An attorney should act as a supportive decision maker, rather than making substitute decisions that the granter may not have chosen given the choice.

They may try to justify inappropriate behaviour on the basis that all they are doing is what the adult would have wanted, which is also one of the general principles. However, that may not be enough to prevent some serious consequences if the spotlight is shone on the actions they have taken.

In most cases appointing a power of attorney works well

The vast majority of cases work well as people appoint someone they trust and understands their wishes.  We should also not forget that the alternative to not having a power of attorney and losing capacity is having a guardian appointed through the court, and that is not without its problems.  When appointing an attorney it is good to be aware of the principles of the Act and to ensure the person or people are willing and able to comply with those principles and, as far as possible, your wishes and interests, after all the attorney has your authority to step in and make sure your bills are paid and that you get the kind of care you need.

What else do I need to know?

Because of the seriousness of granting powers to someone else to use when you may not be able to watch over them yourself, making a power of attorney needs a certain formality. There is, for example, a certificate signed by a solicitor or a doctor to say that they have discussed the document with you and that you have understood its nature and extent and they are satisfied that you are not acting under undue influence.

Remember, the continuing power of attorney over financial matters can be used whenever you want. Welfare powers can only be used if you are no longer able to make decisions yourself.

If you’d like to explore whether a power of attorney is right for you, our Private Client team specialise in this area and are here to help. 

You may also want to read our insights on handwritten wills and inheritance tax