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power of attorney vs. guardianship – knowing the legal differences

In Scotland, the prospect of losing the capacity to make your own decisions can be a daunting thought. However, it’s crucial to dispel the common misconception that your spouse can automatically step in and act on your behalf in such a scenario. The reality is quite different, and it’s essential to be well-informed about the legal options available to you.

What is a Power of Attorney?

A Power of Attorney is a legal document that empowers you to appoint someone you trust to make decisions on your behalf in case you lose capacity. In Scotland, there are various types of Powers of Attorney:

  1. Continuing Power of Attorney: This authorises your chosen solicitor to manage your property and finances exclusively.
  2. Welfare Power of Attorney: This grants your solicitor powers related to your health and well-being.
  3. Combined Continuing and Welfare Power of Attorney: This provides your solicitor with authority over both welfare and financial matters.

All Powers of Attorney in Scotland must be registered with the Office of the Public Guardian before they become effective. You can decide whether to register your Power of Attorney immediately or delay registration until it becomes necessary.

If you choose to register your Power of Attorney right away, your appointed continuing solicitor can use the financial powers with your permission once the deed is registered. These financial powers remain effective even if you lose capacity. However, the welfare powers only come into play if you can no longer make your own welfare decisions.

What is a Guardianship?

A Guardianship Order is only sought when you no longer possess the capacity to handle your affairs. Typically, a close relative or friend initiates the process of seeking guardianship on your behalf. If there are no close relatives or friends available, the local authority can apply for welfare powers.

A guardianship order is considered the last resort and is only granted when no less restrictive option is available to safeguard your welfare and financial affairs. If there’s an alternative way to protect your interests, the court will reject the guardianship order.

Key Differences Between Power of Attorney and Guardianship:

  1. Cost and Efficiency:

    • Power of Attorney is a quick, straightforward, and cost-effective method for estate planning.
    • Guardianships are considerably more expensive and time-consuming, involving court procedures and medical reports. Finalising a guardianship order can take 6 to 9 months.
  2. Retaining Autonomy:

    • With Power of Attorney, you maintain control and select who will make decisions on your behalf if needed. You must understand the implications before granting it.
    • Guardianship is pursued only if you’ve lost the capacity to manage your affairs, and a sheriff decides on the appointment, considering your views if possible.
  3. Powers:

    • A well-drafted Power of Attorney includes broad and flexible powers, ensuring your solicitor can address various future situations to protect your interests.
    • In a guardianship application, the applicant must justify specific powers, which the court may grant or refuse based on necessity.
  4. Duration:

    • Power of Attorney remains in effect until revoked by you or your passing.
    • A guardianship order is typically granted for 3 years, necessitating multiple renewals during your lifetime.

Can an Individual Need Both Guardianship and Power of Attorney?

Yes, you may require both a guardianship and a power of attorney. Your solicitor powers are limited to what you’ve specified in the deed. If a situation arises that your attorney lacks the authority to handle, you may need to seek additional powers from the Sheriff’s court. In such cases, the guardianship or intervention order can coexist with the power of attorney.

In summary, the importance of seeking specialised legal advice for incapacity planning cannot be overstated. If you have questions or need guidance on Power of Attorney or Guardianship in Scotland, don’t hesitate to contact a member of our team. We are here to provide clarity and simplicity in your decision-making process.