Why it's so important to arrange a Power of Attorney

Even if you’ve saved carefully for long term care, made your Will and got your affairs in order, there’s no knowing when life might suddenly throw you a curveball. A sudden change to your health or mental capacity can mean that you’re not able to manage your own financial affairs or make important decisions about your own health and welfare.

If that were to happen, do you know who would step in and take control? And who would you trust to do so?

Who can act on my behalf?

Many people believe that their next of kin or another close relative or friend will be able to pick up the reins. Unfortunately that’s not automatically the case – unless you’ve already set up Powers of Attorney.

What is a Power of Attorney?

A Power of Attorney one of the most important legal documents a person will ever make, alongside your Will. A Power of Attorney is a legal process that allows you to appoint another person to look after your affairs for you if you’re no longer able to. This can be any person – or more than one person – who will act on your behalf, such as a spouse, partner, a relative or a friend. In some cases, it may be appropriate to nominate a solicitor, or a professional attorney.

You can appoint the same attorney or attorneys for each Power of Attorney, but if you don’t, it’s important that all parties like each other, and respect each other’s judgment.

How long does it take to arrange a Lasting Power of Attorney?

The government website, Gov.uk, advises that it can take up to 20 weeks to arrange a Power of Attorney – though it’s often quicker and simpler to complete the documents online. If you already have Powers of Attorney in place, it’s simple for your attorney or attorneys to start making decisions as soon as possible. If not, there could be major delays – impacting your physical, emotional and financial wellbeing.

It’s very important that the person, or persons, you choose are people who know you well and who you absolutely trust to act in your best interests. It will be one less thing for you and your family to worry about if your circumstances change.

How many types of Powers of Attorney are there?

In most parts of the United Kingdom, Powers of Attorney are divided into two types:

1. Property and financial affairs
This allows your attorney or attorneys to make decisions on your behalf about managing your bank accounts, paying bills, paying for social care, or managing your pension and investments. Even deciding what to do with your property if you’re no longer living in it. Having these conversations with your attorneys while you’re fit and well helps make sure your wishes are respected – and that everyone knows what you want to happen if the time comes.
Just to make sure, you can give specific instructions when you create the Power of Attorney. You could, for instance, make special arrangements for your pets to live with certain family members. Or stipulate that any investment over £10,000 should involve your SJP Partner as well as your attorney.

2. Health and welfare
This allows your attorney or attorneys to make decisions on your behalf such as decisions around medical care, moving into a care home, how you’d like to be looked after and even end-of-life care.

Once again, you can leave specific instructions as to your wishes.

It’s a good idea to set up both kinds – and it’s important to remember that each Power of Attorney only covers one person. You can revoke a Power of Attorney if you change your mind about who should look after your affairs or in the event that you regain mental capacity.

In general, and wherever you live in the United Kingdom, you’ll need to arrange separate Powers of Attorney to manage your financial and property affairs, and your health and welfare.

Powers of Attorney in your part of the country

To clarify some of the differences between Powers of Attorney in parts of the United Kingdom, we’ve summarised the key points below.

If you live in England or Wales

• In England and Wales, the two different Power of Attorney are called Lasting Powers of Attorney (LPA). You’ll need to arrange a Lasting Power of Attorney for Property and Financial, and a Lasting Power of Attorney for Health and Welfare.

• You don’t need to use a solicitor, but you may choose to if you already have one, or are finding the process difficult.

• If you don’t set up Powers of Attorney, and you lose mental capacity, your relatives or close friends will need to apply to the Court of Protection to appoint a ‘deputy’ to act on your behalf. This can be time-consuming and distressing – and lead to delays in accessing funds or making decisions. Some delays can be up to six months.

• Even when the deputyship is granted, it has to be renewed on an annual basis and for an annual fee. That’s on top of any solicitor’s fees. What’s more, the deputy has to verify and justify all of their spending and actions in detail, whereas an attorney does not. In a worst case scenario, it’s even possible for an application for a deputyship to be refused.

If you live in Scotland

• In Scotland, the two types of Powers of Attorney are called the Continuing Power of Attorney, which covers the management of property and financial affairs and the Welfare Power of Attorney, which safeguards your health and medical care.

• You can apply for a combined Power of Attorney which covers both.

• You can appoint a solicitor or professional attorney for a Continuing Power of Attorney, but not for a Welfare Power of Attorney – that must be an individual.

• If you don’t appoint attorneys, and you lose mental capacity, your family or close friends would have to apply to the sherriff court and again, this can be a long and costly process. You can apply for an intervention order, which enables someone to make a one off decision. Or you can apply for a guardianship order which enables someone to make decisions for a set period of time

If you live in Northern Ireland

• In Northern Ireland, an Enduring Power of Attorney allows your chosen attorney to manage your financial and property affairs, if you lose mental capacity.

• In Northern Ireland, it is the responsibility of your next of kin to make decisions about your health care and welfare. You cannot appoint an attorney to manage this part of your affairs.

• If you haven’t set up an Enduring Power of Attorney and you lose your mental capacity, someone can apply to the Office of Care and Protection (or OCP) to become a controller.

• A controller can manage your finances, including paying for bills and shopping. They’re usually a family member or someone who knows you well, but it can be a solicitor. Whoever it is, they’ll need the OCP’s permission before acting on your behalf.

When should you set up a Power of Attorney?

Setting up Powers of Attorney is something that can easily be overlooked – and relatives can be caught out if an elderly parent needs immediate support. And It’s important not to wait until you start having problems with your mental capacity either. Once that happens, you’re no longer allowed to apply.

There is also the risk that you might need an attorney to act for you while you’re younger, such as if you were to have a bad accident or be unfortunate enough to be in hospital for an extended period of time.

You can put a Power of Attorney in place at any age once you’re over 18, and you can also revoke it at any point or change your choice of Attorney.

So it’s best to get one sorted early – better safe than sorry.

Arranging a Power of Attorney

Arranging for Powers of Attorney can seem complicated, but more often than we’d like, we hear of clients who are caught in a crisis but haven’t arranged a Power of Attorney. The family is often desperate to be able to release funds to pay for social care, or to make other important decisions, but they are in a legal limbo.

Which is why we urge all our clients to put both Powers of Attorney in place. It’s a simple step, that could make the world of difference to you, and your family. We can help you arrange Powers of Attorney, so please get in touch with us, or your solicitor.

We’re here to help you feel reassured that all your affairs, and your wellbeing, will be looked after as you would wish, if the time comes.

Powers of Attorney involve the referral to a service that is separate and distinct to those offered by St. James's Place. Powers of Attorney are not regulated by the Financial Conduct Authority.