Who Cannot Be a Power of Attorney?

Power of attorney is a vital legal tool that allows someone to manage another person’s affairs when they are unable to do so themselves.

But not everyone is eligible to act as a power of attorney, and understanding the boundaries helps protect both the granter and the attorney from potential misuse. This post explores who cannot be a power of attorney, common pitfalls, and practical steps to take when planning your affairs.

What a power of attorney is and why eligibility matters

A power of attorney (POA) is a formal document that gives another person the authority to make decisions on your behalf. The scope can vary from broad, lasting power of attorney to limited, time-bound arrangements. Eligibility matters because the person chosen must be capable of acting in your best interests, free from conflicts of interest, and trusted to handle sensitive information and finances responsibly.

Legal capacity and age requirements

• Age: In many jurisdictions, including the United Kingdom, a power of attorney can be set up by adults aged 18 or over. However, the person acting as attorney must be legally capable of managing the duties entrusted to them.
• Mental capacity: The granter must have the mental capacity to understand the nature and effect of the POA. If the granter lacks capacity, a court or tribunal may revoke or appoint an alternate arrangement. Similarly, an attorney must have the capacity to perform the powers they are assigned; someone who lacks capacity cannot reliably exercise those powers.

Relationships and conflicts of interest

• Close family members and trusted friends are common choices, but not every relationship is suitable. The key issue is absence of conflicts of interest. An attorney must not stand to benefit personally from the granter’s decisions, and any potential conflicts should be disclosed and managed.
• Professional conflicts: A person who has a business or financial relationship with the granter, or who stands to gain from the granter’s decisions, may be deemed unsuitable. This includes individuals who owe a fiduciary duty to the granter or who could steer decisions for personal gain.

Criminal convictions and financial history

• Criminal history: Certain types of criminal convictions, such as fraud or offences involving dishonesty, can disqualify someone from acting as an attorney. Some jurisdictions impose mandatory disqualifications or require additional safeguards.
• Financial mismanagement: A history of bankruptcy, insolvency, or serious financial mismanagement can raise red flags. Courts or supervising bodies may determine that such a person cannot responsibly manage another person’s finances.

Capacity to perform specific duties

• Financial powers: If the POA includes financial powers, the attorney must have basic financial literacy and an ability to keep accurate records. A person who struggles with budgeting or arithmetic may not be suitable for broad financial duties.
• Health and welfare powers: If the POA includes health or welfare decisions, the attorney should be comfortable with medical information, consent, and end-of-life considerations. A lack of empathy or understanding in sensitive situations can be problematic.

Alternatives and safeguards

• Professional guardians or attorneys: If a potential attorney is not suitable, consider alternatives such as a professional attorney or a trusted professional adviser who can act in a formal capacity with appropriate oversight.
• Co-attorneys: Some plans use two or more co-attorneys to provide checks and balances, though this can also complicate decision-making.
• Safeguards: Independent financial advice, regular reporting, and clear limits on power can help reduce risk. In some places, attorneys must keep records and be subject to supervisory oversight.

The nomination process and capacity checks

• How to appoint: The granter completes a POA document and appoints the attorney(s). In some jurisdictions, there are standardized forms and requirements for witnesses and certification of capacity.
• Capacity checks: In many systems, capacity checks may be required at the time of signing and periodically thereafter, particularly for lasting powers of attorney or durable POAs.
• Revocation: The granter retains the right to revoke the POA at any time, provided they have capacity to do so.

What happens if the wrong person is chosen?

Choosing an unsuitable attorney can lead to financial loss, misuse of information, or decisions that do not align with the granter’s wishes. It may also trigger disputes among family members or require court intervention to remove or replace the attorney.

Final thoughts

Selecting a power of attorney is a serious step that requires careful consideration. Not everyone can or should act as an attorney, and understanding the eligibility criteria helps you protect yourself and your loved ones. If you are planning ahead, consult a legal professional in your jurisdiction to ensure that your POA is valid, effective, and aligned with your intentions.

By choosing a trustworthy, capable, and compliant attorney, you can ensure that your affairs are handled with integrity, even when you are unable to manage them yourself. Remember that power of attorney is about empowerment and protection, empowering you to plan ahead and protect your interests, and protecting you from potential misuse by choosing the right person.