Power of attorney vs. guardianship in Scotland
So what is a power of attorney (POA) all about? How does it differ from guardianship? And why do we use an American word in a Scottish legal document?
All good questions. Last first: attorney is in fact the old English name for a lawyer, and was transported to the American colonies with the English legal system in the 17th century. And even though the UK now uses ‘solicitor’ or ‘lawyer’ as the main descriptor for the high street law agent, as we all know from TV shows, films and crime novels set in the USA, the title of attorney stuck. In Scotland, by the way, solicitors used to be known as Writers.
As for the rest, the power of attorney is a hybrid. Part insurance policy, part prevention, part cure, part deed of trust. As versatile as the proverbial egg. And in my opinion, every person over the age of 50 ought to have one.
Two types of POA
I make these recommendations to reflect the two kinds of POA. Most people will be familiar to some extent with the domestic power of attorney – for an elderly parent who is beginning to become frail and needs a son or niece or other able-bodied younger relative to run to the bank for her, that kind of thing. Just for reference, the other kind is a commercial power – if a business owner is going abroad he may want to leave his partner or lawyer with the right to sign certain important documents in his/her absence.
Focussing on the domestic scene, the deed itself will be drawn up tailored for the individual circumstances of the adult who needs it but in order to be legal and effective, it needs to be registered with the Office of the Public Guardian in Scotland (in Falkirk as it happens). The attorney – the person appointed to help the disabled or confused adult – must be accountable to the Public Guardian, so cannot get away with wasting or stealing money, a concern that used to be very difficult to police before the current law came in. That law is the Adults With Incapacity (Scotland) Act 2000 which also brought in guardianship orders for those who could not sign powers of attorney.
And whilst I could write a book on POAs, guardianship is the awful warning to those without a POA, as it is the alternative. And that’s why the power of attorney is both an insurance policy and is a measure of prevention. Timing is everything. If an adult begins to lose mental faculties (or physical, though as long as the brain at least is on form, one can sort things out legally) then there comes a point at which he or she actually loses legal capacity and is beyond making an informed choice to instruct and sign the power of attorney document. And once that capacity is lost, it is generally gone for good.
Costs of POA vs. Guardianship
Thus once legal capacity to transact is lost, the only way of getting control of an adult’s funds or assets for their own benefit, or to arrange residential care, or nursing care in their own home, or do any one of the million and more tasks and chores needed to support an elderly or ill person, is to seek a formal order of guardianship. And whereas getting a solicitor to arrange, draw up and have signed and registered the POA at a cost of a couple of hundred pounds or so, a court application with all the medical reports and legal bells and whistles that are required will cost thousands of pounds. A POA takes just a few days to organise and complete, a guardianship case takes months, and requires the applicant (the guardian) to appear at court and perhaps answer questions put by a sheriff.
The net result is the same – financial and/or welfare powers over the adult’s affairs are obtained, and the caring relative, friend or appointed solicitor can help the adult for as long as necessary. But as in the old saying, there’s an easy way and a hard way. The hard way of guardianship should be avoided at all cost (literally).
And for those who think that development of Alzheimer’s may be many years away and may be never, there is equally a possibility that one may (at any age) be in an accident and be so injured mentally/physically that management of affairs is necessary. Again, if no POA is lying there ready for use, guardianship is the only alternative. And the older one gets, the shorter the odds are that some such problem – illness or injury, may occur.
Granting the POA today causes no change in status. Like your will, it can be prepared and signed, even registered, and lie unused and ignored for as long as you are well and active. But the nearer you get to old age, the riskier it is to continue along without preparing the POA.
The power of attorney is in itself a supremely flexible instrument. It can be as comprehensive or as limited as the maker wishes – if it is just to pick up a pension or pay bills, that’s fine. If it is to arrange the sale of property, repayment of a mortgage, and arrangement of long-term care, so be it.
Just as in making a will, looking ahead to the future is an important life task. Don’t be surprised if the solicitor your instruct for your will writing suggests putting together a power of Attorney at the same time. The will is there for when you die. The POA is there… in case you don’t.