03 Sep Powers of Attorney: Our Guide
An Isle of Man Power of Attorney is a simple way of giving someone else the authority to act as if they were you by making decisions about you and your things, or your money on your behalf.
It works by drafting a legal document that sets out (i) who you are, (ii) who the attorney is, (iii) what power they have and finally (iv) why you are giving them the power.
- You, or the person giving the power, is called a Donor
- The person who receives the power from you is called the Attorney
- The control or decision-making authority you decide to give the Attorney is called the Power
If you care about what happens to you or your assets, or if you are relying more on friends and family to help you out and want to make it easier for them, you should seriously consider making a Power of Attorney. The next steps are to think: who, what, and when.
Who can be an attorney for me?
Simply: someone you trust. If you can’t think of someone, or would prefer someone totally independent from your affairs, pick a lawyer. If you can, think of a family member or friend, preferably someone who doesn’t benefit from your will or your property/business.
Whilst there’s no requirement for who you can appoint as an Attorney, they need to be an adult, mentally capable and not undergoing bankruptcy proceedings. They don’t need to live on the Isle of Man but it is helpful if they do. You should restrict your choice to someone who is able to
understand what being an Attorney means and what obligations it places upon them.
When considering who to pick, It helps to think about (i) whether they have a conflict of interest, (ii) how long you have known them, (iii) whether they might pass away or lose mental capacity in your lifetime or for the task they have responsibility for, and (iv) whether they are a professional who is regulated by a statutory body such as the Solicitors Regulation Authority, and insured in case any mistakes are made.
You should choose someone who is familiar with your affairs, and who will agree to the role. Professionals can charge for providing the service.
One solution is to choose two or three (or four, but no more!) Attorneys, such as a family member as well as a Solicitor. You can pick whether they can act independently or if they have to agree with each other.
What powers can I give to someone?
With Powers of Attorney, remember: the more complicated you make it, the less easy it is for Attorneys to exercise their power.
The more simple it is, the greater the risk that you give them power for them to do something you weren’t expecting or didn’t think about.
Remember that you can have two or three (or more) different Powers of Attorney made, which gives the same, or different, people separate rights relating to what they can do when you are well, and what they can only do when you lose capacity.
Isle of Man
You can make the power as great or as little as you like, but under Isle of Man law, it can’t cover issues regarding your health . You should consider restricting the power you give away if you only need a specific task doing, because the more widely it is drafted, the more things the Attorney can do, and once it is signed, it will continue to be effective once you’ve lost capacity unless you revoke it beforehand.
If you do want to cover issues regarding your health on the Isle of Man (and of course we recommend that you do, whilst you still can) you need to make a Living Will, also known as an Advanced Directive. This is a letter that you write setting out your wishes in the event that someone else needs to make a decision about your healthcare. Healthcare providers, your family and the Court should take it into account if they should have to make healthcare decisions on your behalf.
England and Wales
The law is different in England and Wales. If you also reside there or you have assets there which your attorney will be dealing with, you can have an English Power of Attorney under English law that covers your health. It won’t be easily enforceable in the Isle of Man in some cases however, so it is always best to have an Isle of Man document for when the need arises.
When should a Power of Attorney come into action?
If your concern is making sure your wishes are always carried out regardless of whether you have capacity or not, then choose one that comes into effect immediately. Of course, this means you won’t be able to stop the Attorneys using their power straight away, unless you carefully restrict what things they can do before you lose capacity and what things they can’t do until you lose capacity.
If your concern is making sure your wishes are carried out only if you lose capacity, then you should specify that the power should only come into effect when capacity is lost. Remember, if you choose this option, your Attorneys will need a Doctor’s opinion to declare that you have lost capacity in order for the Power of Attorney to work. This can give you peace of mind, however.
Simply put, if you’d rather have flexibility, then give a power that comes into effect straight away. If you’d rather have control, choose one that comes into effect when you lose capacity.
Why might I need one?
Help and assistance during busy times
You might not be available when a critical decision needs to be made: like buying or selling a business, or asset such as a house. Perhaps you’re off the Island, or in hospital, or travelling without communication, or you’re a busy person with a PA that needs to handle your personal affairs.
Most people who have a Will also back it up with a Power of Attorney, which is what we recommend. This is because there is always a risk that you might lose capacity earlier than you think (for example being in an accident). As we age, the risk of becoming less capable of managing our affairs increases.
Keeping you safe
Losing capacity might be caused by something as simple as being unwell for a period of time, or having memory loss, confusion. Or, you may simply want someone else to be able to take care of things for you.
A Power of Attorney also keeps you safe in the event that your capacity diminishes beyond recovery: a good example is suffering from dementia. The Power of Attorney makes sure that your wishes are respected in the event that you are no longer in control of carrying them out.
Anyone of any age can make a Power of Attorney (although only those over 18 in some cases), and a good time to get one sorted is if you are also making a Will.
If you aren’t sure whether you need one, get in touch for impartial advice today.
More detail: types of Powers and Isle of Man / England and Wales issues
There are two key issues here when considering what type of Power of Attorney you want:
- What it deals with: healthcare, financial/property decisions or both
- How long it should last for: temporary or permanent, whilst you have capacity, once you have lost capacity, or both
Isle of Man England and Wales Health/Welfare Financial/
Yes Yes No Yes – but only whilst
donor has capacity.
Enduring Yes Pre-existing only No Yes – whilst and after
donor has capacity.
Lasting No Yes (don’t need to
be English or live in
Yes Yes – effective only once
A General power is used for specific circumstances, i.e. buying or selling an asset. It is designed to be temporary and you can use one where you want to limit the task you need help with, or the time, or amount of power that you give.
An Enduring power is designed to last beyond any time that you lose mental capacity, for example during the aging process or if you suffer from dementia. It ‘endures’ beyond the loss of capacity.
A Lasting power only comes into effect once you have lost capacity and is only available in England and Wales. You can have one for health and well-being or financial affairs. It must be registered with the Office of the Public Guardian in the UK (there is a cost of £82 to do so).
Mental capacity is the ability to make a decision. This could be a decision that affects daily life, for example, what to wear or more significant decisions, for example, whether to undergo a surgical procedure or purchase an investment. What is important is a person’s ability to carry out the processes involved in making the decision and not the outcome of the decision. Everyone looking to make a power of attorney must have the mental capacity to do so.
How are they kept safe? Can they be registered with a public authority?
It is up to you and your Attorneys to keep the Power of Attorney document safe. Wills.im offers a Safe Storage option for anyone looking to keep a Power of Attorney document in safe hands. Wills.im carries full professional indemnity insurance to store your Power of Attorney or Will safely, giving you complete peace of mind. We’ll keep your documents in a fire, flood and theft-proof safe for as long as you need, at just 17p per day, and if you need Certified Copies for banks or other authorities, we’ll arrange that too.
Your Attorneys can, and must, register a Power of Attorney that deals with your affairs once you lose capacity with the Isle of Man Courts, but this can only be done once capacity is lost. It is up to you to keep the Power of Attorney document safe in the meantime, or if it will never be valid for registration. If you lose the original copy, you’ll need to make another.
Registration of an Enduring Power needs to be accompanied by a Doctor’s Opinion proving loss of capacity. This should be handled by a lawyer to make sure proper notice is given to the right people, but you can do it yourself if you want. Notice should be served on the Donor’s near relatives, the Attorneys and the Donor themselves. Wills.im can provide both a Doctor’s Opinion as well as handling registration.
Reviewing your Power of Attorney and making changes
You can change your Power of Attorney at any time, as long as you still have legal capacity to do so. If you want to change it, just call us and we’ll make the amendments you need.
You’ll need to make a new one altogether so that it takes the place of your old one otherwise the documents will conflict with one another and could undo all your hard work. It’s important to make sure that all old copies are destroyed.
It’s a good idea to review your Power of Attorney roughly every 10 years but some circumstances might crop up earlier than that such as:
- A new medical diagnosis
- Change of marital or family status
- A general change in your circumstances
Email email@example.com or call 07624 35 60 45 and ask for Eric for a free, no obligation chat about your Power of Attorney.