A General Power of Attorney (GPA), also sometimes known as an Ordinary Power of Attorney, is a legal document that allows an individual to act on behalf of another for a temporary period of time. The document appoints one or more people to make financial decisions on behalf of the person who made the GPA – the “Donor”. It is not often used in England and Wales, because people generally make Lasting Powers of Attorney (LPA), or they already have the older Enduring Power of Attorney (EPA) in place. People generally choose these because they are a more robust and longer lasting solution than a GPA.
The Scope of a General Power of Attorney
The GPA is governed by the Powers of Attorney Act 1971. As stated above, a GPA allows attorneys to make financial decisions on behalf of the donor. These can include, but are not limited to:
- Managing bank accounts
- Paying bills
- Making investments
- Buying or selling property
A GPA can only be made to manage the finances of the donor. There is no equivalent Power of Attorney that allows attorneys to make health and welfare decisions.
It is important to understand that a GPA is only valid while the donor has capacity. If the donor loses capacity, the attorneys can no longer act. Under an LPA or EPA the attorneys can continue to act if the donor loses capacity – it is what they are designed for. In fact, attorneys appointed under a Health and Welfare LPA are limited to acting only once the donor has lost capacity – there is no equivalent Health and Welfare EPA.
When to Use a General Power of Attorney
A GPA is particularly useful if the granter is traveling and cannot attend to their domestic financial responsibilities. Some may opt for a GPA simply for the ease of having someone manage their affairs on their behalf.
Personally, I find them most useful when a client has suffered an illness – in my experience typically a stroke – and need to have their financial affairs urgently tended to. I have also had a client who was suffering from terminal lung cancer and was obliged to act as administrator on her late husband’s estate, so needed to delegate her tasks to someone else.
It takes quite a few months to receive a response from the Office of the Public Guardian after sending LPAs to them for registration. An attorney appointed under an LPA can not act until they have been successfully registered. This leaves a significant gap where no one is able to act for the client. This can cause financial distress to the client and their loved ones. A GPA can be used to bridge that gap.
Creating a General Power of Attorney
A GPA is a drafted document that must specifically outline the scope of the powers of the attorney. Its layout is akin to a typical contract. In contrast to this, an LPA is made by completing the prescribed form available from the Government website. While it is possible to specify instructions and preferences within the LPA form, the layout is provided already by the government. In a GPA, the entire document must be drafted from scratch.
Once drafted and approved, it must be signed by the donor and attorney(s) in front of respective witnesses. The witnesses must be 18 or over and have mental capacity themselves.
At this point, the attorney(s) will be able to act. There is no need to ever register a GPA with the Office of the Public Guardian like there is with an LPA or EPA.
Revoking a General Power of Attorney
Revoking a GPA must be done in writing. This is called a Deed of Revocation. It must be signed by the donor in front of a witness, who must also sign the document. Once the deed has been executed (i.e signed as stated) it must then be served on the attorneys and any other relevant parties – such as your bank. This is to prevent any misuse or malpractice or misunderstanding by your attorneys. You should then assure that the GPA document is destroyed.
If you believe that you may benefit from having a GPA drafted and executed, then don not hesitate to get in touch.