Ordinary Power of Attorney (England and Wales)

What is an ordinary power of attorney?

An ordinary power of attorney is a document that gives authority to another person or corporate body to act on behalf of somebody else in relation to their property and finances. This ordinary power of attorney should be used in England and Wales.

Different power of attorney documents are used in Northern Ireland and Scotland.

What are the different types of powers available under a power of attorney?

An power of attorney can be created as a:

• general power of attorney – this grants broad powers for the attorney to manage the affairs of the donor generally
• limited power of attorney – this grants the attorney the power to deal with a particular issue or manage a particular transaction on behalf of the donor

What is the difference between a lasting power of attorney and an ordinary power of attorney?

A lasting power of attorney will come into effect once the donor loses capacity. An application for this type of power of attorney is made online through the government. A lasting power of attorney can grant an attorney the authority to deal with:

• health and welfare decisions; AND
• property and finance decisions

An ordinary power of attorney grants an attorney the authority to deal with a donor's financial and property affairs only. It will be revoked if the donor loses capacity.

Is it mandatory to have a power of attorney?

Yes, there are certain circumstances where a power of attorney may be required. For example, formal legal processes (such as property transactions) may only be carried out on behalf of a person or body where there is a valid power of attorney in place. Banks and other entities may stipulate that a power of attorney is a requirement when liaising with a third party in relation to a person's finances.

What is a donor?

A donor is the term used to describe the person making the power of attorney (the person who is granting the powers).

What does capacity mean?

Capacity refers to the ability of a person to make decisions. A person lacks capacity if they are unable to make decisions for themselves because of an impairment of, or disturbance in the functioning of the mind or brain.

What cannot be included in a power of attorney?

A power of attorney cannot:

• give the authority for the attorney to make decisions in relation to a donor's health and personal welfare matters
• give the attorney the authority to carry out acts that relate solely to the donor's status (for example to carry out acts which are specific to a husband, wife, lawyer, doctor etc.)
• authorise acts which are unlawful/criminal

What are the prerequisites of a power of attorney?

Both of the parties should have capacity. This means each party must have the ability to make and understand decisions.

The donor should consider the credentials of the proposed attorney, such as whether they are trustworthy and have sufficient understanding of their proposed role. The attorney should not be bankrupt.

Who can enter into a power of attorney?

A donor can be:

• a natural person
• a company or a Limited Liability Partnership

An attorney can be:

• a natural person
• a company or a Limited Liability Partnership

It is also possible to appoint more than one attorney.

Who cannot enter into a power of attorney?

Any natural party to a power of attorney must not lack capacity. This means both parties should be able to make and understand decisions.

In theory, a person under the age of 18 may make a power of attorney, but their capacity and ability to understand the power of attorney will need to be assessed on an individual basis.

An attorney should not be bankrupt.

What can be the duration of a power of attorney?

A power of attorney can state that the powers will remain until either:

• a prescribed date; or
• until the performance of a certain act has been completed.

A power of attorney can be described as irrevocable, meaning the donor cannot terminate it without the attorney's consent and it will not be subjected to most of the usual revocation rules. Under the usual rules, a power of attorney will be revoked:

• upon the bankruptcy of an individual donor
• upon the dissolution or winding up of a corporate donor
• upon the death or incapacity of a party
• through a deed of revocation

What has to be done once the power of attorney has been finalised?

Once the power of attorney has been finalised and signed as a deed (in the presence of a witness), a signed copy should be retained by each party. The attorney will need to share and refer to the power of attorney when acting on behalf of the donor.

Is it necessary to have witnesses for a power of attorney?

The document must be executed as a deed. The signature of a party a deed must be witnessed. The witness should:

• be over the age of 18
• have mental capacity
• not be a party to the deed

What are an attorney's duties under a power of attorney?

An attorney must:

• act in accordance with the authority granted under the power of attorney
• act with due care and skill
• not degelate their powers
• take care not to act in the case of a personal conflict of interest or take advantage of their position
• keep the donor's money separate to their own money
• allow the donor to inspect records of all acts carried out by the attorney under the power of attorney

What must a power of attorney contain?

A power of attorney should:

• create the power – declare that the donor makes the power of attorney and confirm the identity of the donor
• confirm the jurisdiction – England and Wales
• formally appoint the attorney – state the name and address of the attorney or attorneys
• state the powers – if the power of attorney is granting specific authority only
• state how the attorneys may act – if there is more than one attorney, it is necessary to confirm whether they all must act together or whether they may act individually
• confirm details of remuneration – whether the attorney will be paid
• State the duration – how long the powers will last

What laws apply to a power of attorney?

The legal provision application to a power of attorney is The Powers of Attorney Act 1971.

Trustee powers of attorney are also governed by The Trustee Act 1925.

The main legal provisions that govern the execution of deeds in England and Wales are:

• The Law of Property (Miscellaneous Provisions) Act 1989
• The Companies Act 2006

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