What are the Main Types of Power of Attorney?

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Date published: 31 Aug 2021
by DocPro Legal

What are the Main Types of Power of Attorney?

 

Sickness and death are inevitable parts of life, and we all seem to understand the importance of preparing for possible mishaps. But not many seem to realise that we need preparation for an increasingly common disease - dementia, which prevents us from being capable of making well-informed decisions. This is the time where Power of Attorney (PoA) comes into play. This article will give an overview of the different types of power of attorney commonly exercised.

 

Jurisdiction

Relevant legislation and terminologies

Australia

Powers of Attorney Amendment Act 2016; General Power of Attorney and Enduring Power of Attorney

Canada: Ontario

Substitute Decisions Act;  (General) Personal Care Power of Attorney and Property Power of Attorney

Canada: British Columbia

Power of Attorney Act; same as Ontario

Hong Kong

Powers of Attorney Ordinance; General Power of Attorney, Specific Power of Attorney, Enduring Power of Attorney

Singapore

Conveyancing and Law of Property Act; General Power of Attorney, Specific Power of Attorney or Non-Durable Power of Attorney, Lasting Power of Attorney

New Zealand

Protection of Personal and Property Rights Act 1988 ;Ordinary Power of Attorney, Enduring Power of Attorney, General Power of Attorney

 

 

United Kingdom

Enduring Powers of Attorney Act 1985; General Power of Attorney, Specific Power of Attorney and Lasting Power of Attorney

 

What is PoA?

 

A power of attorney (POA) is a legal document giving one person (the agent or attorney-in-fact) the power to act for another person (the principal).

 

The power of attorney is frequently used in the event of a principal's illness or disability, or when the principal can't be present to sign necessary documents for financial transactions.

 

There are three main types of PoAs, namely General/ Ordinary Power of Attorney (General PoA), Specific Power of Attorney (Specific PoA) and Enduring/ Lasting Power of Attorney (Enduring PoA). They are applicable to different situations.

 

Different jurisdictions use different terminologies to refer to the different PoAs, but for the purposes of this article, terminologies are applicable to the Hong Kong jurisdiction will be focused on. In spite of differences in the naming of powers of attorney, the nature and scope of operation are generally the same.

 

General PoA

General PoAs are legal documents that appoint one or more people your Attorney(s) to make decisions for you on financial matters, and to carry out everyday transactions on your behalf. It is useful for situations where you would like to temporarily assign someone else with the authority to carry out transactional activities for you. This means that you may be authorising your attorney to manage your bank accounts for you.

 

A General PoA is applicable to all financial affairs and transactions. In Hong Kong, it must be created in a specific form under section 7 of the Powers of Attorney Ordinance (CAP. 31) as a deed and the Donor's signature must be witnessed by a qualified solicitor in Hong Kong. There exist time limits regarding the validity of a general power of attorney, for example, some banks do not accept a general PoA that is more than 12 months old.

 

A General PoA can be created for a specified time - otherwise, it ceases when you die or if you become legally incapacitated. If you wish to have someone who can act for you if you become legally incapacitated, you must make an enduring PoA.

 

If you have any questions about how to create a valid General PoA, you can access our General PoA template

 

 

Specific PoA

 

On the other hand, if you would like to limit your agent's power to specific affairs only, you have the option of registering a specific PoA.

 

Specific PoAs are legal documents appointing one or more persons to perform certain tasks related to specified assets such as real estate properties, shares and securities. The purpose of creating a Specific PoA is usually to ensure that if something happens to you, your property will still remain intact by giving limited power to a designated agent.

 

For instance, if you own a house worth HK$10 million, then you could apply for a Specific PoA so that your spouse has the right to sell the house without having to seek permission from you first.

 

In Hong Kong, there exist two forms of Specific PoA: Deed Form and Declaration Form.

 

Enduring / Durable / Lasting / Continuing PoA

 

An Enduring PoA, also known as EPA, gives the attorney(s) durable power - which means that they can exercise their authority after the principal has become mentally incapacitated, which is contrary to other types of power of attorney which dissipates once the principal becomes a mentally incapacitated person. However, do note that a principal can only assign to another person enduring PoA when he/ she is still mentally sound. You can cancel your enduring power of attorney at any time, as long as you still have legal capacity.

 

An EPA is known by different names in different jurisdictions, but the concept is largely the same:

 

Types of POA

Coverage

Jurisdictions

Enduring power of attorney (EPA)

 

An Enduring Power of Attorney appoints an attorney to make decisions about your property and financial affairs on your behalf, and it comes into effect if you lose mental capacity or at a designated time.

 

Hong Kong, Australia, New Zealand, South Africa

Lasting power of attorney (LPA)

 

An Lasting Power of Attorney no only covers decisions about your financial affairs, but also your health and care. It comes into effect if you lose mental capacity or at a designated time.

 

Singapore, UK

Durable power of attorney (DPA)

 

A Durable Power of Attorney is similar to an EPA and covers financial matters and properties. The authority continues to apply if you become incapacitated.

 

United States, India

Continuing power of attorney (CPA)

 

A Continuing Power of Attorney is similar to a LPA and confers a more general power (including financial affairs, properties and medical matters) to the attorney and the power will continue if you become mentally incapable.

 

Canada

 

 

In Hong Kong, the Enduring Powers of Attorney (Amendment) Ordinance enacted in 2011 stipulates the relevant laws that govern the assignment and use of Enduring PoA. The enactment gives effect to the LRC’s recommendation to adopt a new statutory form and associated explanatory information drafted in plain language and in a more user-friendly format in the hopes of boosting the take-up rate of Enduring PoA in the city.

 

In light of a growing elderly population and an increasing number of cases of dementia in Hong Kong, the Enduring PoA is a legal tool of special significance and it would be wise for you to start contemplating about the designation of Enduring PoA when you still have a sound mind.

 

For reference, you can also use our Enduring Power of Attorney template available here.

 

Conclusion

 

To sum up, the main types of power of attorney are general power of attorney, specific power of attorney and enduring power of attorney. Although different jurisdictions may adopt different terminologies when referring to these legal tools, the functions and nature of each remain generally the same across most jurisdictions.

 

Assigning trustworthy, dependable agents with appropriate power of attorney according to your needs would be immensely helpful when you may not be physically present to sign certain important documents or when mishaps happen and your mental capacity prevents you from making well-informed decisions about your property/ financial matters. It is especially important for the elderly to pay attention to enduring power of attorney which may come into play when their mental soundness starts to deteriorate.

 

Please note that this is a general summary of the position under common law and does not constitute legal advice. As the laws of each jurisdiction may be different, you may wish to consult your lawyer.

 

 

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