What is a power of attorney?

A power of attorney (POA) is a legal document that gives one or more people, known as attorneys, the authority to make decisions on your behalf if you become unable to do so yourself. These decisions may be related to your financial affairs, healthcare, or both.

Here are just six of the top reasons why everyone should have a power of attorney:

1. Peace of mind: Setting up a power of attorney ensures that your affairs will be managed by someone you trust if you become unable to make decisions yourself. This can give you and your loved ones peace of mind, knowing there is a clear plan in place for handling your financial and healthcare matters.

2. Avoids complications and delays: If you lose the mental capacity to make decisions and don’t have a power of attorney, your family or friends may need to go through the lengthy and costly process of applying to the Court of Protection to become a deputy. This can lead to delays and stress for your loved ones, particularly during an already challenging time.

3. Personal choice and control: Creating a power of attorney allows you to choose who will act on your behalf. You can select someone who understands your wishes and will act in your best interests. Without a POA, the Court of Protection may appoint someone you wouldn’t have chosen yourself.

4. Flexibility and tailored arrangements: You can specify how and when your attorney(s) can act, giving you flexibility and control. For example, with a Lasting Power of Attorney for financial affairs, you can decide whether your attorney can act immediately or only if you lose mental capacity. You can also set out any specific instructions or preferences to guide your attorney’s decisions.

5. Simplifies financial management: A power of attorney can make it easier for your attorney to handle everyday financial tasks, such as paying bills, managing investments, and dealing with property matters. This is particularly helpful if you are physically unwell, live abroad, or need support with managing your finances.

6. Ensures healthcare decisions align with your wishes: A Health and Welfare Lasting Power of Attorney allows your chosen attorney to make decisions about your medical treatment and care if you are unable to do so. This ensures that your wishes are respected, even if you cannot communicate them yourself, and gives your loved ones a clear framework for making decisions on your behalf.

What types of powers of attorney are there?

In the UK, there are two main types of powers of attorney:

• Lasting Power of Attorney (LPA): This is a permanent arrangement that remains in effect if you lose mental capacity. There are two types:

Health and Welfare LPA: Covers decisions about your medical treatment, living arrangements, and daily care.

Property and Financial Affairs LPA: Covers decisions about managing your finances, such as paying bills, managing bank accounts, and selling property.

• Ordinary Power of Attorney: This is a temporary arrangement used when you still have mental capacity but need someone to manage your finances for a limited period(e.g. during a hospital stay or a long holiday .

Who should I appoint as my attorney?

You can appoint anyone you trust, such as a family member, friend, or professional adviser. It’s crucial that the person you choose understands your wishes and is willing to act in your best interests. You can also appoint more than one attorney and specify how they should make decisions, jointly or independently.

When should I set up a power of attorney?

It’s best to set up a power of attorney while you still have mental capacity and can fully understand the implications. Setting it up early ensures your affairs are managed by someone you trust if you lose the ability to make decisions in the future.

How do I set up a power of attorney?

To create an LPA in England and Wales, you need to complete specific forms available on the government website. Once completed, the LPA must be registered with the Office of the Public Guardian (OPG) before it can be used. There is a registration fee, and the process typically takes several weeks. We work alongside businesses who specialise in this to ensure that you have the right structure in place. It is like having your very own estate planning team!

Can I cancel a power of attorney?

Yes, you can cancel a power of attorney as long as you still have the mental capacity to do so. You’ll need to inform your attorney and the Office of the Public Guardian to officially revoke it.

What happens if I don’t have a power of attorney?

If you lose mental capacity and don’t have a power of attorney in place, your loved ones may need to apply to the Court of Protection to be appointed as your deputy. This process is more time-consuming, costly, and involves ongoing court supervision compared to having a power of attorney set up in advance.

If you want to find out more about how to look after your loved ones after death please head to our Guide to Inheritance Planning