We often raise the subject of Powers of Attorney with clients at the same time as we discuss their wills, but this is certainly not the only time that the topic could or, indeed, should be talked about. There is a growing awareness of what a Power of Attorney is but there can still be a reluctance to deal with this at an early stage.
What if there is no Power of Attorney in place and an adult loses capacity? A Guardianship Order immediately springs to mind, but the process involved in obtaining this can take up to six or eight months, and incur significant costs, so is this the best course of action? There are other options available which could be quicker, cheaper and ultimately more suitable. Every authority given is potentially diminishing the adult’s autonomy, so it is crucial to get this right.
The Adults with Incapacity (Scotland) Act 2000 and the Scottish Government’s accompanying Code of Practice set out guiding principles. One of these is that any intervention should be the minimum, least restrictive, option required in the circumstances. A Guardianship Order is at the top of the scale of intervention and should be the last resort. What are the other options?
When dealing with DWP (Department of Work and Pensions) benefits, an application to the DWP to be an Appointee is appropriate. This does not, however, give authority to access the adult’s bank accounts, investments, or other assets. An application directly to the Office of the Public Guardian for Access to Funds is the next option. This covers straightforward situations and authorises access to the adult’s funds in order to pay bills. An application for Access to Funds is restricted to just that and does not authorise any decisions regarding the adult’s personal welfare. But either - or indeed, both - of these options may be all that is required to meet the adult’s needs for some time. The advantages of these options are that they are easy to apply for, quick, and cost very little.
If the adult’s affairs are more complex, or involve their personal welfare as well as financial affairs, the next option is an Intervention Order. This is restricted to a specific transaction and lasts for the duration of that action only. Rightly so, there are safeguards to ensure that the adult is truly incapable of undertaking the action themselves and that the appointed person is the most appropriate, so an Intervention Order requires an application to the Sheriff Court – which can be a lengthy and costly procedure. If you subsequently need another Intervention Order to cover a different action, it would be the same process and costs again.
The advantages of a Guardianship Order are its broad range and duration, and if it is reasonably foreseeable that a range of actions will be required, it is considered prudent to apply for financial and welfare Guardianship rather than an Intervention Order. It must be justifiable though, as the Sheriff can, and will, strike out certain powers if they are not required. The Sheriff can also deny the Guardianship Order and instead grant an Intervention Order, being a lesser intervention in the adult’s affairs. This cannot happen the other way round – if you apply for an Intervention Order, but actually require a Guardianship, you will have to start again from scratch with a new application.
It is tempting, therefore, to apply for a Guardianship Order and then accept that the Sheriff may knock this down to an Intervention Order. This practice seems to be at odds with the principles of the Act, but solicitors must also be mindful of the ongoing nature of the adult’s needs and acting in their client’s best interests by minimising longer term procedures and costs, bearing in mind that the duties imposed on an Intervener or Guardian can in themselves be onerous and costly. What may be overlooked is the possibility of applying for Access to Funds as a short term solution whilst an Intervention Order or Guardianship is being progressed. In all cases, there should be a full discussion with the client of all the available options in order to be sure that the right action, the least restrictive to the adult, is being taken. All of this can, for many clients, be avoided with a properly drafted Power of Attorney put in place whilst the adult is fully capable.
l Catriona Torrance is a Solicitor in the Private Client Team at Balfour+Manson LLP www.balfour-manson.co.uk