Lawyers have warned as many as half of all continuing Powers of Attorney (PoA), papers drawn up by solicitors to let friends or family manage the financial and property affairs of those incapable of doing so themselves, could be invalid.
Their concerns were sparked when Sheriff John A Baird, writing in a formal judgment, argued that a single continuing PoA, drawn up in a standard style, was illegal.
His view would see thousands of families and institutions forced to redraft PoAs.
However, some documents now in doubt may have been signed by people who were of sound mind when they did so, but who are no longer capable of making such a decision.
Lawyers warn their affairs may have to be put in order in difficult and expensive court proceedings.
The Public Guardian, Sandra McDonald, who maintains a register of all PoAs, yesterday warned that the sheriff's opinion, if correct, would mean "more than 50%" of existing continuing PoAs might be invalid. "It's thousands," she added.
Ms McDonald, whose Falkirk office publishes standard styles for the documents on its website, is now seeking legal clarity on the issue, applying for a formal direction from another sheriff.
Susan Oates, senior solicitor with Edinburgh private client law firm Murray Beith Murray, said: "The implications of Sheriff Baird's comments could potentially be huge.
"People who thought they had put their affairs in order, by putting in place a Power of Attorney, might have to take additional action.
"If the granter of a power of attorney has since lost capacity, the position becomes more complex and the solution might involve a court application at considerable expense.
"Many solicitors will be updating their style deeds as a precautionary measure."
The Law Society of Scotland is advising solicitors to review the wording of PoA documents.
Coral Riddell, its head of professional practice, added: "Sheriff Baird has acknowledged that the consequences of his decision could be that other Powers of Attorney in a similar style could also be invalid.
"This could have very serious implications for solicitors and some of their most vulnerable clients. We intend to look into the matter more closely, but in the meantime are advising solicitors to review any Power of Attorney documentation they hold and consider whether they should alter the wording.
"We are aware that the Sheriff's decision is under appeal, and will continue to keep our members updated."
A Scottish Courts Service spokeswoman said: "A potential issue with the commonly used continuing Power of Attorney style was recently raised within an Opinion of sheriff Baird, Sheriff of Glasgow and Strathkelvin. Clarity on this matter is currently being sought through early legal process.
"In the meantime we have advised practitioners to consider the divergent views on this matter in order that they can determine if a more explicit reference to their intention of conferring continuing power of attorney is required."
Ms McDonald added: "The majority of the legal community thinks Sheriff Baird is wrong - that is now a matter for a court to decide."