Power of Attorney

Overview

A power of attorney ("POA") is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter. The person authorizing the other to act is the principal whereas the one authorized to act is called the donor. In Hong Kong, there are three types of power of attorneys:

  • General Power of Attorney ("GPA")
  • Limited Power of Attorney ("LPA")
  • Enduring Power of Attorney ("EPA")

General Power of Attorney

A GPA is a legal document that appoints one or more people to make legal and financial decisions on behalf of the donor (the person who wishes to give their power of attorney to someone). The GPA applies to all of legal and financial affairs of the donor. The donor can choose to revoke the GPA at any time as long as he/she is of sound mind.

Limited Power of Attorney

An LPA is very similar to a GPA except that it is designed to be used for a specific purpose and solely for that purpose. The LPA ceases to have any effect once the purpose of the LPA has been achieved. An LPA can also be limited as to time.

Enduring Power of Attorney

An EPA allows its donor, while that person is still mentally capable, to appoint an attorney to take care of the legal and financial matters of the donor in the event that the donor subsequently becomes mentally incapacitated. In this regard, the key advantages of an EPA are as follows:

  • allow an individual to choose the person or persons who will look after the individual’s affairs if he/she becomes incapable of doing so;
  • avoid expensive and potentially distressing court proceedings for the appointment of a trustee to look after the individual’s affairs;
  • provide an efficient and cost-effective way of administering the individual’s property; and
  • ease the difficulties and distress that may otherwise be suffered by the donor’s family in managing the donor’s affairs.

A GPA will cease to be effective automatically if the donor becomes mentally incapacitated. However, an EPA will continue to be effective whilst the donor is mentally incapacitated and allow the attorney to continue to manage the legal and financial affairs of the donor despite such incapacity.

An EPA must be witnessed by both a practising solicitor and a registered medical doctor.

Fees

The fees charged will depend on the complexity of the arrangement and the time spent on drafting the POA.

If you would like to know more about which type of power of attorney is best suited for your needs and how you can get such a document prepared, please contact us.

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