A Power of Attorney is a legally binding document which appoints a person or persons to make financial and/or welfare decisions on behalf of the granter when they are no longer capable of making those decisions themselves. Whilst clients have no qualms in making or updating a Will, when it comes to “Powers of Attorney” and “incapacity” these are thoughts which are often brushed aside as “not relevant as I am young, fit and healthy” or “something to be considered well into the future”.
The truth is that we live in a time where we have an ever increasing population and, in which, people are living longer than they ever did before. Sadly, the reality is that permanent and or temporary mental and/or physical incapacity can affect any one of us at any age by way of illness or accident. As such appropriate future planning is more important than ever and this includes planning for the “what if” as well as the “what is” or “what will be”. You can only make a Power of Attorney if you have capacity to grant one. It is too late once you have lost capacity to make a Power of Attorney. Accordingly, as part of their future planning we recommend that all clients seriously consider making a Power of Attorney to safeguard against future mental and/or physical incapacity.
Here are five key reasons why you SHOULD make a Power of Attorney:
1) If you don’t have a POA, your assets may be frozen and your representatives will be unable to immediately act on your behalf
In the event that you lose mental and/or physical capacity, and you do not have a Power of Attorney in place, then your assets would be frozen and your representatives (or the local authority in the absence of appropriate representatives) require to apply to court for what is known as a Guardianship Order. This is a far more complex, lengthy, and in some cases, expensive, procedure (Guardianship Orders are worthy of an article on their own and are a tale for another day).
2) They don’t cost too much (!)
As well as being practical (you can choose for financial powers to have immediate effect if you require your attorney to act on your behalf in a financial transaction, for example, if you are abroad) they are also relatively inexpensive (a Power of Attorney generally, does not cost much more than a Will).
3) You ensure your financial and personal welfare will be looked after by someone YOU trust
Fundamentally, a Power of Attorney is a straightforward way of ensuring that your financial affairs and/or personal welfare are dealt with by the person or persons of your choice and trust, whilst you have capacity to make that choice. You can appoint an individual or joint attorneys and substitute attorneys (in the event that your chosen attorney refused or was unable to act). You may also appoint different attorneys to deal with financial and welfare powers. Personal welfare powers enable your appointed attorney to deal with all aspects of your personal welfare. This includes where you live (the local authority has power to place an incapacitated adult in a care home), medical treatment, personal care, social and cultural activities and, in some cases, how you dress and what you eat. The personal welfare powers only come into effect on a diagnosis of incapacity by a registered medical practitioner. You can choose whether to have the financial powers of immediate effect or to come into effect at a later stage of your choosing.
4) A POA can easily be amended or revoked
A Power of Attorney includes a certificate by a practising solicitor. Advocate or licensed medical practitioner confirming that the person understands the document they have signed and its effects. Your appointed Attorney is legally obliged to act in your best interests. The Power of Attorney is then registered with the Office of the Public Guardian (who has certain powers over the exercise of the attorney’s powers and can investigate any complaints in relation to their actions). Nothing is set in stone and a Power of Attorney can easily and simply be withdrawn and/or amended if you change your mind or wish to alter the appointment or powers.
5) A POA will give you peace of mind
Ultimately, a Power of Attorney provides peace of mind and certainty that your financial affairs and /or personal welfare will be looked after by a person or persons of your choosing and trust in the event that the worst happens. If you do not have a Power of Attorney I would urge you to seriously consider making one. Equally, following substantial reform of the law with the Adults with Incapacity (Scotland) Act 2000, some older Powers of Attorney may not be effective. If you have a Power of Attorney, which pre dates 2000, then you should check with your solicitor in case it requires to be updated.Kat Sey Solicitor – Private Client @Kat_Sey www.blackadders.co.uk
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