A properly drafted Power of Attorney allows you to make provision in advance for the possibility that, at some stage, you require somebody else to deal with your financial or welfare affairs. However, it is important to understand what powers an attorney has under a Power of Attorney, and their limitations.
In Scotland, there are two types of Power of Attorney which an individual can grant: (1) Welfare and (2) Continuing. The former allows the attorney(s) to deal with all aspects of the care and welfare of an individual, whilst the latter empowers the attorney(s) to deal with the granter’s finances. Whereas the former can only come into effect when a granter is no longer able to look after their own affairs, the financial powers can come into effect earlier should the granter wish to do so.
Frequently, these will be combined into a single document which will set out the powers and the authority which the respective attorney(s) are to be given. It is common practice to include extensive powers, to provide insofar as possible, for all future circumstances which might arise, however remote or unlikely.
Having said this, the power to change a granter’s testamentary writings is not a power that can be granted under a Power of Attorney. Solicitors can only take Will instructions directly from their client, not from their attorney, and so it is vital that you ensure that you have a Will in place and that you review this from time to time to make sure that the terms still accurately reflect your wishes, whilst you have the mental capacity to do so.
Testamentary capacity refers to the ability of an individual to comprehend their own circumstances and to prepare a Will or instruct changes to their existing Will. Anyone who is both legally and mentally capable and who is signing the document willingly can make a Will. To be legally capable, the testator must be over the age of 12. It can be more difficult to ascertain whether the testator is of sound mind. The testator must be capable of making a decision, communicating that decision, understanding the implications of that decision, and retaining the memory of making the decision. So long as an individual retains such capacity, they can continue to make as many alterations as they see fit. Once this capacity is lost, it is no longer possible to prepare or instruct changes to a Will.
Until there is clear court authority to the contrary, it is not possible, in Scotland, for an attorney to change someone’s Will, irrespective of whether the attorney is trying to act in accordance with the testator’s wishes and in good faith.
In England, there is a provision for an application to be made to the Court of Protection for a Statutory Will to be made no behalf of someone who is unable to do so due to a lack of mental capacity; however, there is no equivalent to this in Scotland.
On death, beneficiaries may wish to enter into a document called a Deed of Variation to change the terms of the Will. A Deed of Variation is a document whereby a beneficiary entitled to an interest in a Will varies that interest. This can be a very useful mechanism, particularly where the beneficiary has no need of the bequest and wishes to redirect it to his or her own children to “skip a generation” and avoid a double charge to Inheritance Tax.
Adam Swayne is a solicitor within our Asset Protection Group and specialises in Estate planning and Wills. If this article has raised any questions or you would like to discuss any issues covered here, then please complete our contact form, or call us on 0131 225 1200 to speak to one of our specialist estate planning lawyers.
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