Did you know every three minutes someone develops dementia in the UK and 42,000 people under the age of 65 have dementia?
With statistics like these on the increase, it’s important to know you and your affairs would be taken care of by someone you know and trust if you did not have the mental capacity to do this yourself. A Power of Attorney takes care of exactly this situation. It is a legal document allowing someone to act on your behalf and make decisions for you if you cannot do this yourself or no longer want to.
What is a Power of Attorney?
There are three types of Power Attorney:
- Ordinary Power of Attorney – covering your financial affairs whilst you have the mental capacity to look after these yourself but want someone else to do this for you. Perhaps you are finding it difficult to get to the bank or need a short stay in hospital.
- Lasting Power of Attorney – giving someone you trust the authority to manage your affairs when you do not have the mental capacity to do so yourself. You can have a Lasting Power of Attorney for your financial matters and another for your healthcare.
- Enduring Power of Attorney – these were replaced in October 2007 by the Lasting Power of Attorney but if yours was signed prior to this then it should still be valid.
What happens if I do not have a Power of Attorney?
If you do not have a Power of Attorney in place and you are not able to look after your financial matters, your relatives cannot simply request access to your bank accounts to pay your bills, mortgage and care costs if required. In order to take care of things for you, they need to apply through the Court of Protection for deputyship.
This process can be time-consuming and expensive. The Court of Protection aims to review cases within 16 weeks however this can take longer for more complex situations. There are also fees to be paid to the Court by the deputy, including an annual supervision fee. If a professional deputy is assigned by the Court to the estate, such as a solicitor or accountant, then they also will charge for carrying out the deputyship. Whilst the application is being processed by the Court of Protection, your bank accounts could be frozen leaving your relatives little money to pay your bills or for your care.
Who would manage my affairs without a Power of Attorney in place?
You need to consider who would apply for deputyship should the situation arise. As you would not have the mental capacity to choose, the person applying may not be the person you would want to be managing your financial affairs.
In addition, whilst a Lasting Power of Attorney enables you to choose who manages your financial matters and who makes decisions about your health care, deputies are not appointed to manage your healthcare. In this situation, these decisions are usually left to those providing your care and treatment to make the best decision they see fit in the circumstances.
The benefits of a Power of Attorney
By setting up a Power of Attorney whilst you are fit and well, you will have peace of mind that should you require a stay in hospital due to an accident or have longer term health issues, your affairs will be looked after by someone you have chosen and trust. They will be able to quickly access funds for you to pay bills on your behalf and make healthcare decisions based on your wishes. They will not have to undergo a lengthy process with the Court of Protection and incur fees to establish deputyship for your estate.
How old do I need to be to set up a Power of Attorney?
Any adult over the age of 18 can put a Power of Attorney in place. Indeed, some young people have Powers of Attorney whilst they are travelling abroad so that parents can manage their finances whilst they are away. Since accidents can happen to anyone and bearing in mind that the average age of strokes is decreasing, we’d recommend everyone sets up a Power of Attorney as you never know when you’ll need it.
If you would like to discuss an existing Power of Attorney or are considering putting one in place, Flackwoods can help you. As a new client, please contact us for 30 minutes free advice regarding your Will. You can call Ian on 01403 738777 or email email@example.com