Power of Attorney
Growing older can mean problems for us and our loved ones. Loss of mobility or illness can make it difficult to manage your affairs, and the prospect of unpaid bills can cause unnecessary stress and anxiety and delay someone’s recovery. An elderly relative losing capacity is difficult enough for loved ones to deal with, without the added worry that finances are becoming muddled.
What if I am unable to manage my affairs?
There may come a time in your life when you are unable to manage your financial affairs or personal welfare, owing to some form incapacity, and you will need someone to act on your behalf. Even the young can encounter problems due to sudden accident or illness, and it can be invaluable having a reliable person who is able to manage your personal affairs and remove the anxiety of having unpaid bills at a time when you need peace of mind.
By creating a Power of Attorney in advance ensures that if the worst were to happen, you can rest assured that both your financial affairs and personal welfare are in safe hands.
Who do I choose?
You can appoint a friend, relative or a professional as your Attorney, this allows them to act on your behalf. It is important that you choose who you would like to act on your behalf very carefully, you should choose people you can trust to act in your best interests, giving consideration to how they manage their own affairs. It is always a good idea to appoint more than one Attorney to ensure that this power is not abused.
The different types of Powers of Attorney (applicable to England and Wales)
You may have heard of an Enduring Power of Attorney (EPA) and be aware that this was replaced in October 2007.
These have been replaced with three different documents:
- A Lasting Power of Attorney (LPA) for property and affairs.
- A Lasting Power of Attorney for personal welfare.
- A General Power of Attorney.
LPA for Property and Affairs
An LPA for property and affairs
This authorises the Attorney to make decisions about the donor’s property and affairs. The powers extend to all matters concerning the donor’s property and affairs: this could include buying or selling property in the donor’s name; managing their investments, continue to run their business and make decisions about the donor’s healthcare and payment for this care. You can place legally binding restrictions and conditions on your Attorney’s powers and the scope of authority they have within the LPA, however, these decisions may still need to be made for you which may then involve going to the Court of Protection and the decision being made in your best interests.
LPA for Welfare
A Lasting Power of Attorney for welfare covers decisions about a donor’s personal welfare which can include where they live, how they are cared for and what healthcare they receive, for example the decision to send a donor to a nursing home. The payment of the nursing home could not however, be made on just the Lasting Power of Welfare, but in conjunction with a Lasting Power of Property and Affairs.
General Power of Attorney
A General Power of Attorney allows the Attorney to make decisions and act in any matters relating to the donor’s property and affairs (with the exceptions of making a Will, making gifts or performing in the donor’s role as a personal representative (administrator) or trustee.)
It is important to note that the donor remains liable for the actions of the Attorney and as such you should only appoint an Attorney who you implicitly trust.
A General Power of Attorney is effective immediately and will remain in force until it is either cancelled by the donor, or should the donor become mentally capable, then the General Power is automatically revoked. The General Power would also be revoked by the death or bankruptcy of either the donor or the Attorney. Unlike a Lasting Power of Attorney, there is no scope for restricting the Attorney’s powers.
A General Power of Attorney can be revoked at any time by either writing 'cancelled' or simply tearing it up.
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