The Law Society has recently published a new practice note on powers of attorney and in particular the requirements of banks who deal with attorneys. Although the practice note is aimed at solicitors who have been appointed under a power of attorney, it provides a helpful summary for anyone interested in knowing more about the type of powers available and the different requirements which banks may have before they will accept the authority granted under those powers.
It will often only be in very difficult circumstances that it is necessary to have to manage another person's financial affairs, or make decisions relating to their health and welfare, by way of a power of attorney.
These difficulties can be compounded if, having planned ahead to ensure that such powers are in place before they are needed, attorneys finds themselves struggling to convince third parties, particularly banks, to accept their authority to act on another person's behalf.
Types of power The three types of power which will enable you to act on another's behalf are known as ordinary, enduring and lasting powers of attorney.
Ordinary powers can be used to grant general, or specific, powers over another person's affairs and they are often used where an individual is under a physical, but not mental, disability or where an individual is likely to be abroad for some time. If a person grants authority under an ordinary power and subsequently loses mental capacity, the ordinary power is automatically revoked.
Enduring powers could be granted at any time before 1 October 2007. An unregistered enduring power can be used to manage another person's affairs, unless it contains a restriction in that regard, but when the donor of the power starts to lose the mental capacity to manage their own affairs, the enduring power must be registered with the Office of the Public Guardian before it can be used further.
From 1 October 2007, the Mental Capacity Act 2005 introduced lasting powers of attorney, of which there are two types. Lasting powers can be granted separately, one to cover the donor's property and financial affairs and the other to deal with their health and personal welfare.
Lasting powers relating to the donor's property and finances must be registered with the Office of the Public Guardian before they can be used to manage an individual's affairs, even if the donor still has capacity. A lasting power which relates to health and personal welfare matters cannot be used whilst the donor still has capacity.
Bank requirements Every bank has its own requirements before it will accept an attorney's authority and these may also vary depending on which type of authority the attorney has.
An attorney (or the donor) should therefore speak to their bank to find out what the requirements are before trying to exercise their powers. Most banks will always need to see evidence of the attorney's identity and evidence of their authority, usually the original, or a certified copy, of the power of attorney, whether it is registered or unregistered.
More information For more information about powers of attorney, please contact
Lesley Lintott,
Julie Burton or
Anthony Whitwell.