Power of Attorney: Authority Granted Before It Is Needed

What follows is the working version of granting authority to act on your behalf: the decisions in the order you actually meet them, with the reasoning attached.

What the document does

A power of attorney is a formal document in which one person authorises another to take defined actions on their behalf. The authority can be broad or narrow, covering everything from a single property transaction to the whole of somebody's financial affairs. It is a grant of authority rather than a transfer of ownership, so the person granting it retains their property and their rights.

The attorney acts in the grantor's name and is generally obliged to act in the grantor's interests rather than their own. The forms available, their names and their effects differ substantially between jurisdictions, which makes local advice essential.

Continuing and non-continuing forms

An ordinary power of attorney typically ends if the person granting it loses the mental capacity to have granted it. That is precisely the moment when it would be most useful, which is why many systems provide a form that continues despite incapacity. Those continuing forms usually require additional formalities, sometimes including registration with a public body before they can be used.

Some systems separate financial decisions from health and welfare decisions, requiring different documents for each. Which forms exist, what they cover and how they are registered are entirely questions of local law.

What happens without one

Where somebody loses capacity without having made a continuing power, family members generally cannot simply take over their affairs. Most systems require an application to a court or tribunal for the appointment of somebody to manage the person's affairs.

That process is typically slower, more expensive and more supervised than acting under a power the person granted themselves. It also means the appointed person may not be who the individual would have chosen, since the decision is made by others. Making the document in advance is far cheaper and gives the person genuine control over who acts for them.

Choosing an attorney

The person chosen should be trustworthy, reasonably organised and willing, since the role can involve substantial ongoing administration. Appointing more than one, either to act together or independently, spreads the burden and provides a check on decisions.

Requiring joint action on major decisions while allowing independent action on routine ones is a common and practical arrangement. Naming a replacement in case the first choice cannot act avoids the document becoming useless at the wrong moment.

Discussing the appointment with the person beforehand is obvious and is skipped surprisingly often.

The attorney's duties

Attorneys are generally required to act in the grantor's best interests, to keep the grantor's money separate and to keep records. Making gifts from the grantor's assets is usually restricted, sometimes severely, and unauthorised gifts are a frequent source of difficulty. Several jurisdictions have supervisory bodies with powers to investigate concerns about how an attorney is acting.

Acting outside the authority granted can expose the attorney to personal liability and to removal from the role. Reading the specific duties that apply in the relevant jurisdiction, at the point of appointment, is the sensible starting point.

Where housing, employment, money or family arrangements are genuinely at stake, the next step is a solicitor or an advocate, not an article.

Practical points

Institutions often want to see the original document or a certified copy, and registering it where required takes time. Making the document well in advance avoids the difficulty of establishing capacity when a decision is already urgent. Telling the appointed people where the document is kept is as important as making it in the first place.

Reviewing it periodically ensures the chosen people are still appropriate and still willing to act. This is a document where professional preparation is inexpensive and where formality errors are common and consequential.

The takeaway

The document is only useful if it exists before it is needed. General explanation only, and not legal advice.

Most disputes are settled by whoever kept the better record.