If you don’t have a Power of Attorney in place, Adrian Moy, one of Pembroke Financial Service’s Independent Financial Advisers and a specialist in dealing with the financial planning implications of legal matters, explains some of the reasons it’s a step you should be taking as part of your estate plans.
Adrian says “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 are unable to do so. Thinking about not having the mental or physical capacity to be independent and make decisions of your own 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.”
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. But 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 return to a position where you can 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.
Adrian says “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 is vital to understand that no one has the automatic right to make decisions on your behalf and that 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. Adrian’s comment here is “This 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
From a financial planning perspective, Adrian confirms that “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.”
You really don’t have to have a substantial asset base to benefit from Lasting Powers of Attorney. While the legalities of an LPA would be drafted by your solicitor or Will Writer, Pembroke can offer power of attorney guidance to provide the framework that ensures your financial wishes are met. Call us on 01273 774855 or email email us by clicking here for estate planning and financial advice you can trust.
The Financial Advice Authority does not regulate Power of Attorney, will writing or estate planning.