There is a common misconception that when a person loses capacity to make their own decisions their spouse is automatically entitled to step in and act for them. The reality is that there is no legal authority for anyone to act on your behalf in this scenario. An individual can obtain formal legal powers to act on another person's behalf either by way of a power of attorney or a guardianship order.
What is a power of attorney?
A power of attorney allows you to appoint someone to act on your behalf if you lose capacity.
There are various types of power of attorney in Scotland: -
1. Continuing power of attorney. This authorises your attorney to deal with your property and finances only.
2. Welfare power of attorney. This provides your attorney with powers in respect of your personal health and wellbeing only.
3. Combined continuing and welfare power of attorney. This provides the attorney with powers in respect of both welfare and financial matters.
All powers of attorney in Scotland must be registered with the Office of the Public Guardian before they can be used. You can decide whether to register your power of attorney straight away or whether to delay registration until the document is required.
If you decide to register your power of attorney straight away, then your continuing attorney can use the financial powers with your permission as soon as the deed is registered. The financial powers then continue to be effective if you lose capacity. The welfare powers however will only take effect if you can no longer make your own welfare decisions.
What is a guardianship?
A guardianship order is only appropriate if you no longer have capacity to deal with your own affairs. A guardianship would likely be sought by a close relative or friend. If you do not have any close relative(s) or friend(s), the local authority can apply for welfare powers.
A guardianship order must be the least restrictive option available to safeguard your welfare and / or financial affairs. As such, a guardianship will only be granted as a last resort. If there is another means of safeguarding your welfare and / or finances, then the court will refuse the order.
What are the main differences between power of attorney and guardianship?
Cost and efficiency
A power of attorney is a quick, straightforward, and cost-effective way to plan for the future.
Guardianships are much more expensive and time consuming. As a guardianship application is a court process, court procedures must be followed. Various medical reports must be obtained. Generally, a guardianship order will take between 6 and 9 months to finalise. Your family may find it difficult to deal with matters on your behalf in the interim.
Retaining autonomy
With a power of attorney, you retain control and choose who will make decisions for you if you lose capacity. Before you can grant a power of attorney, a solicitor or doctor must be satisfied that you understand the implications of signing the deed.
In contrast, a guardianship order will only be pursued if you no longer have capacity to deal with your own affairs and the decision regarding whether to grant a guardianship order is made by a sheriff. A mental health officer will try to ascertain your views as to who you wish to be appointed, however if a sheriff deems the applicant to be appropriate, they can grant the order.
Powers
A well drafted power of attorney should include wide ranging and flexible powers. This ensures that your attorney is able to deal with any situation that might arise in the future so that your finances, property, health and welfare are protected.
With a guardianship application, the applicant will be asked to demonstrate to the court why a particular power or powers are needed. If a sheriff does not think that a particular power is appropriate, they can refuse to grant that power.
Duration
A power of attorney will subsist until such time as it is either revoked by you or until your death. To revoke a power of attorney, again you must demonstrate that you have capacity.
A guardianship order will usually only be granted by the court for a period of 3 years. This means that a guardian is likely to have to make several applications for renewal during your lifetime, incurring significant legal costs each time.
Is it possible that an individual may need a guardianship and a power of attorney?
Your attorney will only have the powers you have listed in the deed appointing them. If your attorney is faced with a situation that they have no power to deal with, they will be unable to act. It may be necessary in this scenario to ask the Sheriff court for additional powers. Your attorney can apply for a guardianship order (or an intervention order where authority for a specific one-off action is needed). Again, the Sheriff will only grant additional powers if doing so will be of benefit to you. In this scenario, the guardianship or intervention order will exist alongside the power of attorney and the two will be used together.
The importance of seeking specialist legal advice about how best to plan for incapacity cannot be overstated. If you have any questions about power of attorney or guardianship, please contact a member of our personal team.
Contributor
Solicitor
