Why you should have a Power of Attorney in place
Posted by siteadmin on Tuesday 26th of May 2020.
Millions of Brits haven’t named a Power of Attorney. It may seem like something you can put off for a while, but it’s something we should all have in place.
A Power of Attorney is a legal document which gives someone you trust the ability to make decisions on your behalf if you’re unable to do so. Thinking about lacking the mental or physical capacity to be independent and make decisions isn’t something anyone wants to do. However, it can happen and having a Power of Attorney in place can provide you with some security if it does happen.
Being unable to make your own decisions is often something we associate with old age and dementia in particular. As a result, naming a Power of Attorney can seem like something that’s fine to put off for a few years or even longer. Yet, accidents and illnesses can strike at any age. It’s important to note that a Power of Attorney can make decisions on your behalf on a temporary basis as well as a permanent one. If you were to recover and in a position to take control of decisions again, you can do so.
You may think that you wouldn’t need someone to act on your behalf, that everything would stay on the course you’ve set out. But even being unable to make decisions for a few months can have a lasting impact. There are two types of Power of Attorney to consider when looking at what would happen if there was no one making decisions on your behalf.
Health and welfare: This relates to areas such as medical care, moving into a care home and life-sustaining treatment. You may have clear ideas about what you’d like to happen should you become ill. A Power of Attorney allows you to discuss these with a loved one who will then be able to make these decisions.
Property and financial affairs: This type of Power of Attorney allows a trusted person to manage your bank, pay bills and collect your pension. It can help ensure your finances remain secure and commitments are met. Even a few months could have an impact if someone isn’t able to access your accounts to settle bills, for example.
It’s also important to note that no one has the automatic right to make decisions on your behalf, this includes spouses and civil partners.
What happens if there’s no Power of Attorney?
If you don’t have a valid Power of Attorney in place, an application would need to be made through the Court of Protection. The Court of Protection can decide if you’re able to make your own decisions, make an order if you lack the mental capacity to make decisions, or appoint a deputy to make decisions on your behalf. The process can be costly and lengthy, delaying decisions that may be important. It’s a process that can be stressful for both you and your loved ones.
4 reasons to have a Power of Attorney
- A Power of Attorney should be part of your financial plan when considering ‘what-if’ scenarios and putting in place measures to ensure your security and plans stay on track as much as possible.
- It can provide financial security if something were to happen by enabling someone to take control of your finances, including ensuring payments are met and you’re able to access income.
- It’s also an opportunity to make sure your care and health wishes are met by discussing them with your trusted Power of Attorney.
- The legal document also supports loved ones, without one in place it can be difficult and time consuming to go through the Court of Protection to act on your behalf.
Supporting other estate plans
Naming a Power of Attorney should be done alongside a wider estate plan too. This may include writing or reviewing your will and considering a potential Inheritance Tax bill when you pass away. Putting these pieces in place together can ensure a cohesive plan that is aligned with your wishes. If you’d like to discuss legacy planning and safeguarding your future, please get in touch.
Please note: The Financial Conduct Authority does not regulate Power of Attorney, will writing or estate planning.
Will writing is not part of the Quilter Financial Planning offering and is offered in our own right.