Why it’s so important to arrange a power of attorney
At a glance
- If you become unable to make decisions about managing your money, property or your medical care, you can appoint someone you trust to look after your affairs with a power of attorney.
- A power of attorney means loved ones can make decisions on your behalf – without one you may have serious delays in arranging proper healthcare or accessing your money.
- Be aware there are two kinds of power of attorney: one for property and financial affairs, one for health and welfare; both are simple to set up.
Even if you’ve saved carefully for long term care, made your Will and got your affairs in order, there’s no knowing when life might suddenly throw you a curveball. A sudden change to your health or mental capacity can mean that you’re not able to manage your own financial affairs, or make important decisions about your own health and welfare.
If that were to happen, do you know who would step in and take control? And who would you trust to do so?
Who can act on my behalf?
Many people believe that their next of kin or another close relative or friend will be able to pick up the reins. Unfortunately that’s not automatically the case – unless you’ve already set up a lasting power of attorney.
What is a power of attorney?
The Law Society of England calls a Lasting Power of Attorney one of the most important legal documents a person will ever make 1. A Lasting Power of Attorney, as it’s called in England and Wales, is a legal process that allows you to appoint another person to look after your affairs for you if you’re no longer able to. This can be any person – or more than one person – who will act on your behalf, such as a spouse, partner, a relative or a friend.
How long does it take to arrange a lasting power of attorney?
The government website, Gov.uk, advises that it can take up to 20 weeks to arrange a power of attorney – though it’s often quicker and simpler to complete the documents online2. If you already have powers of attorney in place, it’s simple for your attorney or attorneys to start making decisions as soon as possible. If not, there could be major delays – impacting your physical, emotional and financial wellbeing.
It’s very important that the person, or persons, you choose are people who know you well and who you absolutely trust to act in your best interests. It will be one less thing for you and your family to worry about, if your circumstances change.
How many types of powers of attorney are there?
There are two different kinds of power of attorney:
1. Property and financial affairs
This allows your attorney or attorneys to make decisions on your behalf about managing your bank accounts, paying bills, paying for social care, or managing your pension and investments. Even deciding what to do with your property if you’re no longer living in it. Having these conversations with your attorneys while you’re fit and well helps make sure your wishes are respected – and that everyone knows what you want to happen, if the time comes.
Just to make sure, you can give specific instructions when you create the power of attorney.
2. Health and welfare
This allows your attorney or attorneys to make decisions on your behalf such as medical care, moving into a care home, how you’d like to be looked after and even end-of-life care.
Once again, you can leave specific instructions as to your wishes.
It’s a good idea to set up both kinds – and it’s important to remember that each power of attorney only covers one person.
What happens if you don’t have a power of attorney in place?
If you haven’t set up a power of attorney, and you’re no longer able to make decisions for yourself, things can get very complicated and distressing for you and your family.
You might need to access money from your savings to pay care home fees, or sell your house to cover the cost. Without a power of attorney, someone close to you would need to apply to the Court of Protection for a deputyship, which can take as long as six months.
It can be both expensive and highly stressful. Until the deputyship is arranged, all your affairs will effectively be in limbo.
Even when the deputyship is granted, it has to be renewed on an annual basis and for an annual fee. That’s on top of any solicitor’s fees. What’s more, the deputy has to verify and justify all of their spending and actions in detail, whereas an attorney does not. In a worst case scenario, it’s even possible for an application for a deputyship to be refused.
When should you set up a power of attorney?
Setting up powers of attorney is something that can easily be overlooked – and relatives can be caught out if an elderly parent needs immediate support. And It’s important not to wait until you start having problems with your mental capacity either. Once that happens, you’re no longer allowed to apply. . Someone would need to apply for a deputyship from the Court of Protection, to act on your behalf.
There is also the risk that you might need an attorney to act for you while you’re younger, such as if you were to have a bad accident or be unfortunate enough to be in hospital for an extended period of time.
Arranging a power of attorney – there’s no time like the present
More often than we’d like, we hear about clients who are caught in a crisis but haven’t arranged a power of attorney. The family is often desperate to be able to release funds to pay for social care, or to make other important decisions, but their hands are tied.
Unfortunately, there’s nothing anyone can do to help, other than guide them towards the Court of Protection and the painful process of applying for deputyship. This just adds to the nightmare that everyone is already going through.
Which is why we urge all our clients to put both powers of attorney in place. It’s a simple step, that could make the world of difference to you, and your family. We can help you arrange powers of attorney , so please get in touch with us.
Powers of Attorney involve the referral to a service that is separate and distinct to those offered by St. James’s Place. Powers of Attorney are not regulated by the Financial Conduct Authority.
SJP Approved 14/11/2023
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