General Power of Attorney: A Complete Guide
In life, the ability to make decisions that affect our personal and financial well-being is a fundamental aspect of our autonomy.
But what happens if circumstances arise where you are unable to manage your affairs, whether due to travel, illness, or temporary incapacity?
In these situations, ensuring that someone you trust can step in to make those decisions on your behalf is not just a matter of convenience—it’s about security, peace of mind, and continuity.
One powerful legal tool that allows you to delegate decision-making authority is the general power of attorney (GPA).
What is a General Power of Attorney?
A general power of attorney is a legal document that enables you (the donor) to appoint someone else (the attorney) to manage your property and financial affairs on your behalf.
Unlike the more widely known lasting power of attorney (LPA), a GPA is only valid as long as you retain mental capacity. This means that if you lose the ability to make decisions for yourself, the GPA becomes null and void, and your attorney can no longer act on your behalf.
The scope of a GPA can be broad or specific. You can grant your attorney the power to manage all your financial matters, or you can limit their authority to certain tasks, such as handling a specific transaction or managing your affairs while you are abroad.
This flexibility makes the GPA a valuable tool for managing your financial affairs in a way that suits your personal needs.
When Would You Need a General Power of Attorney?
There are various scenarios in which a general power of attorney might be necessary or beneficial:
Travel or Extended Absence
If you are planning to be out of the country for an extended period, a GPA allows someone you trust to handle your financial affairs in your absence. T
hey can ensure that bills are paid, investments are managed, and any necessary transactions are completed without delay.
Temporary Incapacity
In cases where you may be temporarily incapacitated due to illness or injury but are expected to recover, a GPA can ensure that your financial matters are taken care of during your recovery period.
Business Affairs
If you own a business and need someone to make financial decisions on your behalf while you focus on other aspects of the business or are temporarily unavailable, a GPA can delegate those responsibilities to a trusted individual.
Simplifying Complex Financial Management
For individuals with complex financial portfolios, or those who simply need assistance managing their financial affairs, a GPA can provide the necessary support.
Why Do You Need a General Power of Attorney?
Having a general power of attorney in place provides several key benefits:
Immediate Action
Unlike an LPA, a GPA does not require registration, meaning it can be used immediately after it is signed and witnessed. This is crucial in situations where decisions need to be made quickly.
Flexibility
A GPA offers flexibility in terms of the powers you grant to your attorney, allowing you to tailor it to your specific needs and circumstances.
Peace of Mind
Knowing that your financial affairs will be managed by someone you trust can provide significant peace of mind, especially during times of uncertainty or absence.
Continuity
A GPA ensures that there is no disruption to the management of your financial affairs, even if you are unable to oversee them yourself.
General Power of Attorney vs. Lasting Power of Attorney: What’s the Difference?
While both a general power of attorney (GPA) and a lasting power of attorney (LPA) allow you to appoint someone to manage your affairs, they serve different purposes and have distinct legal implications.
Mental Capacity
A GPA is only valid while you have mental capacity. If you lose capacity, the GPA ceases to be effective. An LPA, on the other hand, remains valid even if you lose mental capacity, allowing your attorney to continue making decisions on your behalf.
Scope of Authority
A GPA is limited to property and financial affairs, while an LPA can cover decisions related to both financial matters and health and welfare. This means that if you want someone to make decisions about your medical care, an LPA is necessary.
Creation and Registration
Creating an LPA is a more involved process that requires a certificate provider and registration with the Office of the Public Guardian, whereas a GPA only needs to be signed by the donor and witnessed.
Use Case
A GPA is ideal for short-term or specific purposes, such as handling affairs while you are abroad, whereas an LPA is designed for long-term planning, particularly in the event of future incapacity.
What Information Do You Need to Create a General Power of Attorney?
Creating a general power of attorney is a relatively straightforward process, but it requires careful consideration of several key factors:
1. Choice of Attorney
The most crucial decision is choosing your attorney. This should be someone you trust implicitly to manage your financial affairs responsibly and in your best interest.
2. Scope of Authority
You need to decide whether the GPA will grant general authority over all your financial matters or be limited to specific tasks or decisions.
3. Witness
The GPA must be signed by you (the donor) in the presence of a witness who is over 18, has mental capacity, and is not a party to the deed.
4. Time Frame
Consider whether you want the GPA to be effective for a specific period or indefinitely, and whether it should include an expiry date.
5. Special Instructions
You may want to include specific instructions or limitations in the GPA to guide your attorney’s actions.
Do You Need Other Legal Documents to Accompany a General Power of Attorney?
While a GPA is a powerful tool on its own, it may not cover all your needs. Here are some additional legal documents you might consider:
Lasting Power of Attorney (LPA)
Given that a GPA becomes invalid if you lose mental capacity, it is wise to also create an LPA to ensure continued management of your affairs.
Will
A GPA does not have any effect after your death, so it’s important to have an up-to-date Will in place to dictate how your estate will be managed.
Living Will (Advance Decision)
If you want to specify your wishes regarding medical treatment in the event that you are unable to communicate them, consider creating a Living Will alongside your GPA.
Keeping Your General Power of Attorney Updated
Your circumstances and relationships may change over time, so it’s important to regularly review and, if necessary, update your GPA.
You may need to revoke a GPA if it is no longer needed or if you wish to change your attorney. Revocation must be done formally in writing, and your attorney should be notified of the revocation.
Can You Prepare a General Power of Attorney Yourself?
You can prepare a general power of attorney yourself, as long as the document follows a prescribed form as set out in Schedule 1 of the Powers of Attorney Act 1971.
Once drafted, it must be signed by you and witnessed by an appropriate individual.
However, while it is possible to create a GPA without professional assistance, there are risks involved in doing so.
Errors in the drafting or execution of the document can render it invalid or result in unintended consequences.
The Benefits of Using a Legal Professional
Engaging a legal professional to assist with creating your general power of attorney offers several advantages:
Expert Guidance
A legal professional can provide advice on the most appropriate type of power of attorney for your circumstances, whether that be a GPA, LPA, or both.
Accuracy and Compliance
A legal professional ensures that the GPA is correctly drafted and executed in accordance with legal requirements, reducing the risk of errors that could invalidate the document.
Tailored Advice
A legal expert can help tailor the GPA to your specific needs, advising on any special provisions or limitations that should be included.
Future Planning
They can also advise on other important documents, such as an LPA or a Will, ensuring that all aspects of your estate planning are coordinated.
Conclusion
A general power of attorney is a vital legal instrument that offers a practical and flexible solution for managing your financial affairs when you are unable to do so yourself. Whether you need someone to step in temporarily during an absence or illness, or you require ongoing assistance with complex financial matters, a GPA can provide the necessary support.
However, it’s essential to understand the limitations of a GPA and consider complementing it with other legal documents, such as an LPA, to ensure comprehensive protection for your future. While it is possible to create a GPA yourself, seeking professional legal advice can provide peace of mind, ensuring that the document is correctly drafted and fully meets your needs.
Why choose ELM?
Planning for the future can be a tricky task, and ELM Legal Services is here to guide you every step of the way. With a track record of assisting over 30,000 clients across England and Wales, we understand the importance of getting it right.
At ELM, we believe in making the process as straightforward as possible. Our experienced team provides personalised, expert, advice tailored to your specific needs. Whether you need immediate assistance with managing your property and finances, or you’re preparing for what might lie ahead, we help you plan for the future with peace of mind.
Get in Touch
For more information on probate, Wills or estate planning, call us on 0117 952 0698 or submit a free, no-obligation enquiry.
