A Power of Attorney is as important as a Will in keeping control of assets and finances, so plan ahead to ease the pressure in later life.
Everyone knows that they should write a Will, but not quite as many see the importance of a Power of Attorney.
Whilst a Will enables you to decide what happens to your personal assets after you die, a Power of Attorney allows you to appoint someone to make decisions about your financial affairs and personal welfare while you’re still alive.
It is vital to plan ahead to prevent the expense and concern inflicted on your loved ones if you become mentally or physically incapacitated without the safety net of a Power of Attorney. It is therefore important to know the different types and options available.
Why should I consider a Power of Attorney?
There is a common misconception that a Power of Attorney is only for those lacking mental capacity due to Dementia or Alzheimer’s when this is not the case. Someone can lack mental or physical ability due to injuries or conditions resulting from car accidents or strokes.
In these circumstances, there is no automatic right for a relative to take control over an individual’s affairs. If a Power of Attorney isn’t in place, the relative must apply to the Court of Protection before they can deal with any personal matters, which can be a long, expensive process.
What is the difference between an Ordinary and Lasting Power of Attorney?
An unrestricted Lasting Power of Attorney gives the entrusted individual the right to deal with your affairs on your behalf whilst you have mental capacity and make decisions on your behalf when you are no longer able to make those decisions yourself, whereas an Ordinary Power of Attorney gives someone the authority to deal with your financial affairs only while you still have reasonable mental capacity.
An Ordinary Power of Attorney may be helpful in instances when you are away for long periods of time or don’t have time to look after assets yourself.
What is mental capacity?
Having mental capacity means being able to understand and retain sufficient information to be able to make an informed decision, be able to balance that information up and come to a conclusion which can be communicated. You need to be capable of forseeing the consequences of making a particular decision (or of failing to make it). It is possible to be capable of making a decision about a simple matter but not have capacity to deal with a more complicated one.
Under the Mental Capacity Act, Attorneys must take all reasonable steps to help the person who appointed them to make a decision for themselves. If, after these steps have been taken, the Attorney believes that you cannot come to a decision then they can do so on your behalf.
Who should I choose as my Attorney?
The role of an attorney involves a great deal of responsibility so it’s vital to choose a person you trust. More than one person may be appointed and you can choose different people to have responsibility for different aspects of your affairs. You should always discuss the appointment of Attorneys with them, explain how you would like things to be done and making sure that both you and they are happy with the arrangement.
The attorney can make decisions on things such as buying and selling property and dealing with bank accounts, bills and investments. If they have a personal welfare LPA they can make decisions about where you should live, your medical treatment and even whether or not to withdraw life sustaining treatment.
Will it be effective straight away?
The General Power of Attorney can be effective from the moment it is signed. A Lasting Power of Attorney is only effective once it has been registered with the Office of The Public Guardian. It can also contain restrictions so that it can only come into effect in particular circumstances. In addition, a Lasting Power of Attorney in respect of Health and Welfare can only be used once it has been registered and there is a loss of capacity.
When this state of mind is reached, a verdict must be made by a professional to say you no longer have the mental capacity to make decisions for yourself.
How do I go about getting a Power of Attorney?
Since a General or Lasting Power gives an Attorney so much power it is a good idea to seek Legal advice. If you wish to do it yourself the forms and guidance are available from the Court of Protection Website. They will not, however, give you any legal advice.
How much will a Power of Attorney cost?
A Lasting Power of Attorney can cost as little as a £350 + VAT, on top of which you will need to pay the £110 registration fee to the Office of the Public Guardian. If you lose capacity and someone (and it could be anyone, including the Local Authority) has to make an application to deal with your affairs on your behalf via the Court of Protection it can commonly take up to six months and cost in the region of £2,000.
Beecham Peacock Solicitors in Newcastle can advise on Advance Decisions and Lasting Powers of Attorney. Call us on 0191 2323048 or email firstname.lastname@example.org