The Power of an Attorney

I speak to a lot of people about Lasting Powers of Attorney and one response I often hear is that people think they are too young to put Powers of Attorney in place – there is a perception that Powers of Attorney are only for the very elderly, or that if you are married, your spouse will be able to deal with everything for you.

However, Powers of Attorney are not just there for those who are beginning to lose mental capacity through dementia or Alzheimer’s; there are many unexpected events which could occur which might mean that from a physical or mental point of view, you are unable to continue to manage your affairs as you have done before.

We have heard even as recently as this month of a family whose son in his 40s is suffering from Covid-19 and has had to be placed in a medically induced coma. He is a divorced, currently single man, with income to manage and a mortgage to pay. His parents have faced a complete wall in dealing with the banks who will not speak to them or give them any information as there is no Power of Attorney in place. Hopefully this is a temporary situation for their son, but had he had a Power of Attorney in place, they could have managed things for him seamlessly in the interim.

It may also be a surprise, but it is also a misperception that your spouse will automatically be able to deal with financial matters on your behalf – if you hold any assets in your sole name, then without a Power of Attorney in place you may find that the banks or other institutions refuse to deal with anyone.  There was a lot of media coverage last year about TV presenter Kate Garroway and the financial problems she was facing with her husband in hospital and no way to manage his separate financial affairs.

Having a Lasting Power of Attorney in place is excellent preparation for the future – and you could think of it as being like an insurance policy. You take it out hoping that it will never need to be used, but if something unexpected happens, then you know that it is the person or people you have chosen who will manage things on your behalf and that they will have the authority they need to do this.  Once the Power of Attorney is in place it can potentially last for your lifetime, giving you peace of mind that your finances will be protected and looked after if something unexpected occurs.

If a Power of Attorney is not in place and you lose capacity to manage your finances, then the only option is an application to the Court of Protection for what is known as a Deputyship Order.  This allows someone to act on your behalf in relation to financial matters, but it will not necessarily be the person you would have chosen.  An individual applies to the Court for this Order, the Court assess their suitability and then decide if they should be allowed to help manage things for you.  Once the appointment is in place, the Court have system of supervision and management, which involves an annual report to them by the Deputy, annual management fees to be paid and a security bond to be put in place. All extra expense which can be avoided by having a properly set up Power of Attorney to start with.  And the Court’s process takes much longer to work through due to the number and complexity of the applications they deal with.

With a Lasting Power of Attorney in place, your Attorneys can simply take over the running of your finances immediately without delay, or if give you any support and help you need if you can still make those decisions yourself.

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