During the pandemic, we have seen a great many clients very keen to prepare or update their Will as a matter of ‘getting their affairs in order’. As is often the case, the demand for Power of Attorney was not quite as high. If you keep up with the headlines, you may be aware of the plans to modernise Powers of Attorney in England and Wales. We, in Scotland, have a different Power of Attorney system. However, these headlines may have left you wondering whether a Power of Attorney may be beneficial to you.
Whilst most people have heard of a Power of Attorney, many still disregard its benefits due to certain misconceptions about what Powers of Attorney are and what they mean. So let’s bust some myths!
Myth 1: “I don’t need a Power of Attorney, I’m Young”
Most clients who come to us looking to get a Power of Attorney are over 50. However, there are a lot of situations that show that Powers of Attorney are highly beneficial throughout a person’s lifetime.
If you’re anything like me, you will be hopelessly hungry for a holiday after 18 months of staying indoors and staycations. Imagine you were jet-setting off to your dream holiday location, and whilst you were running through the airport your wallet falls out of your pocket. When you realise the wallet’s gone, you’re in a foreign country with no money and no access to Wi-Fi. If you have a Power of Attorney registered with your bank, you could phone your Attorney and ask them to transfer some money from one account to another account in a matter of minutes. And if you are going away for a longer period of time, the Power of Attorney can also be used to sign any legal or financial paperwork that may need to be dealt with in your absence.
Or worse, consider the unfortunate situation in which you are in an accident, and lose your mental capability to decide what treatment or medication you should be given. I know what you’re thinking – ‘what are the chances?’ But, if the past 18 months have shown us anything, it’s that life is unpredictable. We hope that nothing will happen to us, but none of us have a crystal ball to see the future … or a DeLorean to take us there.
Myth 2: “Capacity is Clear-Cut – once it’s gone, it’s gone”
It is a common misconception that once you lose capacity to make one decision, you lose capacity to make all decisions. This is not the case. In fact, there’s a lot more to it. Capacity should be thought of as a spectrum. You may lose capacity to make one decision, and retain capacity to make another. For example, a person suffering from dementia may lose the capacity to enter into a contract, but they may not lose capacity to choose what they would like to do on a daily basis, or what food they want to eat, or what clothes they prefer to wear.
Similarly, your level of capacity can fluctuate depending on your condition. The simplest example of this is a person who loses capacity temporarily as a result of an accident, but regains their capacity as they recover. Their Power of Attorney could be used during the period of incapacity, but with decision-making reverting back to the person themselves upon recovery.
Capacity must be assessed on a case-by-case basis – taking account of the nature of the decision itself as well as the date and time at which it must be made. Only when you do not have capacity can your Attorney use their discretion to make the decision for you.
Myth 3: “They’re the Attorney so they could just do whatever they want!”
People often put off doing a Power of Attorney because they worry that their Attorney will be able to do whatever they please. But an appointed Attorney does not have free reign, and there are important rules about how they may use their power.
For a start, the law provides five guiding principles which an Attorney must consider:
- The first, of course, relates to your best interest. However, this principle says your Attorney can’t make a decision unless it’s beneficial to you.
- The second principle says your Attorney should take the least restrictive measure to achieve the benefit. For example, if they are trying to maintain your safety, they should do so in the way that least restricts your freedom.
- The third principle states your Attorney should consider your wishes before they make any decisions on your behalf. If appropriate, they should take account of your present wishes. However, they should also take account of your past wishes.
- The fourth principle requires your Attorney to consult with others who have an interest in your wellbeing. For example, if you appoint your partner as your Attorney, they should consult with your children before any decision is made.
- The final principle directs your Attorney to encourage you to make decisions on your own behalf where you have the skills and to encourage you to develop the skills to make decisions where you don’t. For example, a person who finds it difficult to verbally communicate should be encouraged by their Attorney to convey their decision by alternative means.
Powers of Attorney can be beneficial to anyone, regardless of age or illness. It is an important means of planning for the future, and can be every bit as important as a person’s Will. It is preparing for unforeseeable situations just like taking out insurance. Life can be unpredictable, so it is better to plan for the worst whilst still hoping for the best!
If you wish to discuss Powers of Attorney in more detail, please get in touch with Blackadders’ Private Client Team working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth and across Scotland.
Rachel Morrison, Trainee Solicitor
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