When we get older, it’s essential to prepare for things that might happen unexpectedly, like becoming sick or unable to think clearly.
A Power of Attorney (PoA) lets you pick someone you trust to make decisions for you, to ensure your wishes are followed, and you’re looked after in the best way possible. Knowing that someone you trust will manage your things if you need help gives you peace of mind.
What’s the difference between a will and a Power of Attorney?
A will and a Power of Attorney are both legal papers, but they work at different times. A will is used to say what you want to happen to your stuff (like your house, money, and other belongings) when you die. A Power of Attorney, on the other hand, lets someone else make decisions for you while you’re still alive.
What types of Power of Attorney are there?
Different kinds of Power of Attorney can help protect you and ensure your wishes are followed, even if you can’t make decisions for yourself.
A Lasting Power of Attorney (LPA stays in effect even if you can’t think clearly, unlike an Ordinary PoA (which I’ll explain later). There are two types of LPA that you can set up:
Property and Financial Affairs LPA: This type of LPA lets the person you choose (your attorney) make decisions about your money matters, like handling your bank account, paying bills, selling your house, or investing money. It makes sure your money-related things are managed the way you want.
Health and Welfare LPA: A Health and Welfare LPA lets your attorney choose your healthcare and living situation if you can’t do it yourself. It ensures your preferences for medical care, where you live, and end-of-life choices are followed.
It’s hard to know what might happen in the future. So, everyone should set up these two types of LPA. They’re essential for planning your future. If you don’t have these LPAs, and you become unable to think clearly, your family would need to go to court to get permission to manage your things. This can be expensive and stressful at an already challenging time.
An Ordinary Power of Attorney is usually used for temporary situations, like when you need help because you’re physically unable to do things or you’re out of the country for a while.
This type of PoA lets the person you pick manage your money matters and make decisions for you, like paying bills, getting your benefits, or selling property. But it stops working if you become unable to think clearly.
You can limit what your attorney can do. For example, you can let them access your bank account but not make decisions about your house. An Ordinary Power of Attorney only works while you can still make your own decisions. If you want someone to act for you if you lose your mental capacity, you should consider setting up a Lasting Power of Attorney.
What does mental capacity mean?
Having total mental capacity means you can make or communicate decisions when they need to be made. You need to understand what decision you’re making, why you’re making it, and what will likely happen because of your decision.
Needing more time to understand or communicate doesn’t mean you don’t have mental capacity. Efforts should always be made to help someone know so they can make their own decision before saying they’ve lost mental capacity.
If you’re married, or in a civil partnership, you might think your spouse would automatically be able to make decisions about your money and healthcare if you can’t. But that’s not true. Without an LPA, they don’t have the legal right to do this.
How do I set up a Power of Attorney?
When picking an attorney, it’s essential to choose someone you trust completely, who knows your values, and who will act in your best interest. Could you talk to them about your plans and ensure they’re willing to take on the responsibility? It’s also good to pick a backup attorney, just in case your first choice can’t or doesn’t want to act when the time comes.
Register with the Office of the Public Guardian in the UK to make your Lasting Power of Attorney official. This registration checks that your PoA is legitimate and effective. While you don’t have to register an Ordinary Power of Attorney, it’s still a good idea.
There is a fee to set up an LPA, but if you receive certain benefits or have a low income, you might not have to pay.