Putting a power of attorney in place and registering it with the bank

Our article ‘Do you have a living will?’ tells you about how living wills are used. You may choose to set up a living will to appoint others to manage your affairs if you lack capacity to make your own decisions. This article also talks about a few points you should consider when writing your living will. 

We know that using different terms to describe similar concepts can be confusing, so let’s break them down before we begin. We’ll be talking about powers of attorney, living wills and authorisations. A power of attorney or authorisation lets you give someone else the power to manage affairs on your behalf. Powers of attorney can be general or limited. 

• A general power of attorney: gives the person you authorise the power to manage ‘all affairs’ on your behalf if you lack capacity. It’s a commonly used agreement and is registered by a notary.
• A living will: besides appointing someone to act on your behalf, you may also want to specify your wishes and instructions for various scenarios if you lack capacity. This type of agreement is often referred to as a ‘living will’. A general power of attorney will form part of a living will.
• count mandate. Instead, yoAn account mandate: an account mandate is an example of a limited power of attorney. The authorised party’s power will be limited to the bank account for which the account mandate has been set up. For more information, please read our article ‘How can an account mandate benefit you?’. You don’t need to make an appointment with a notary to set up an acu can request one online very easily.

The person giving the power of attorney is called the authorising party. The person who may act on your behalf is generally called the authorised party. You might also hear the terms representative, deputy or agent.

If you want the person you’ve authorised to manage your banking, you’ll need to register a power of attorney with us.

A power of attorney usually takes effect in two ways: either immediately or only when the authorising party becomes incapacitated. In the latter case, a doctor must formally diagnose the authorising party as incapacitated before the authorised party may exercise their powers.

A power of attorney can be registered with the bank if the authorised party has the power to act on your behalf. If the power of attorney takes immediate effect, the person you've authorised has powers from day one. While this doesn’t necessarily mean that the authorised party will immediately begin managing your affairs, it does mean you have everything set up for when you’re no longer able to make your own decisions. This happens on the understanding that the person you’ve authorised won’t exercise their powers earlier than necessary.

Many authorising parties believe that the person they've authorised may exercise their powers only when required to do so. However, a doctor must formally diagnose you as incapacitated before the authorised party may act on your behalf. This makes sense if you consider that a power of attorney is specifically meant for that situation. Here are three reasons why an immediate power of attorney could be a preferable option:

1. The person you’ve authorised won’t be able to exercise their powers if you have a power of attorney that takes effect only when you become incapacitated. That’s because a doctor’s statement is required.
2. You’ll then need to register the power of attorney with the bank, which also takes time.
3. You may still be able to manage your own affairs but would prefer the authorised party to do this on your behalf in the meantime. However, if the power of attorney can only be activated on the basis of a doctor’s statement, the authorised party won’t be able to exercise their powers yet.

Your bank will want confirmation that only an authorised person may manage your banking. If the power of attorney was put in place over three months before you register it with the bank, the bank will perform an additional verification. While this verification isn’t foolproof, it does offer greater assurance. The verification may consist of up to two steps:

1. Your notary will check that the power of attorney hasn’t been revoked in the Central Register of Living Wills (CLTR).
2. Your notary will check that the power of attorney hasn’t been revoked in their records. 

Your notary can help you with these checks, but may charge for them.

You may grant more than one person power of attorney and authorise each person to act independently on your behalf. This could be useful if you have two children, for example, and want to give them both powers to act on your behalf. However, these powers are given on the understanding that your children will consult with each other about the actions to be performed and who performs them.

You may also put a succession plan in place in case something happens to an authorised party leaving them no longer able to act on your behalf. You may appoint a person as ‘authorised party A’ and another person as ‘authorised party B’, as a substitute for authorised party A.

You may also put a joint power of attorney in place, in which case both authorised parties need to sign for all instructions. In terms of online bank transfers, you may decide to authorise one person to enter the payment and the other person to approve it. There are limitations to joint powers of attorney, however. For instance, a joint power of attorney can’t be used to authorise debit card payments. That’s because, as a bank, we can’t demand that your authorised parties withdraw money together or pay for your groceries at the supermarket together.

In light of these limitations, each authorised party is usually authorised to exercise their powers independently. Alternatively, you can choose to let your authorised parties arrange this themselves by granting a substitute power of attorney. This means that you give permission to your authorised parties to give some powers to another authorised party.

As you’ve read, there's a lot to think about and a lot of choices to make when arranging a power of attorney. It’s also a good idea to regularly check whether a power of attorney is suited to your current life situation. For instance, if the power of attorney grants joint powers to your children on condition of a doctor’s statement, your children may need to wait some time before they may act on your behalf. This is something you may want to change. A power of attorney with immediate effect, giving each child independent powers to act on your behalf, is a lot more practical.

• Making a living will or registering a power of attorney
• More information about money for later