Wealth

Get the Power!

You and your partner have both made wills. Well done! But imagine if one of you were in an accident that left you in a coma. Despite both of you having written wills, if you haven’t made power of attorney The Court of Protection may take control of your assets, leaving your partner with a legal battle to access your bank accounts

Why do you need power of attorney?

Everyone knows you should write a will to make sure your loved ones are provided for when you die, but what happens if you are left mentally unable to make decisions because of accident or illness?

With an ageing population it happens more than most people think - and if you haven’t got power of attorney specifying who can look after your affairs you’ll have to go through the Court of Protection. The court was set up to protect the assets of vulnerable people

A Power of Attorney allows someone to make decisions on your behalf, should there come a time when you lack mental capacity to do so yourself

‘Mental capacity’ means being able to make decisions. They could be about everyday things like what to wear or when to pay a bill, or more important decisions like making a will and deciding where to live. Someone can lack mental capacity because of an injury or condition, such as a car accident, stroke or dementia. Some people may have capacity to make decisions about some things but not others, or their capacity to make decisions may change from day to day

While you have mental capacity, you can set up a Lasting Power of Attorney (LPA) to give someone the authority to make decisions on your behalf. This person is known as an attorney, while the person who makes the LPA is called the donor

There are two types of LPA:

- A Property and Financial Affairs LPA covers decisions about the donor’s property and money
- A Personal Welfare LPA covers decisions about the donor’s healthcare and personal welfare

You could also set up an Ordinary Power of Attorney, which gives someone else the power to handle your financial affairs for you. It is only valid while you have mental capacity to make decisions about your finances, so you can keep an eye on what the attorney is doing

The role of attorney involves a great deal of power and responsibility, so make sure you think carefully about who you choose. You must be able to trust them to make decisions in your best interests

How to grant control of your finances - lasting power of attorney

There’s an easy way to avoid the Court of Protection, and that’s to grant someone you trust lasting power of attorney, giving them the right to look after specific aspects of your financial affairs or health and welfare after you lose the capacity to do so

- You can get copies of the forms needed to complete either a Property and Affairs Lasting Power of Attorney covering money matters, or a Personal Welfare LPA covering medical matters, from the Office of the Public Guardian

- You can chose to appoint anyone you trust as long as they are over 18 and not bankrupt

- You need to fill in the forms and get it signed by all relevant parties (yourself, an independent third party called a certificate provider who verifies your capacity, and the person you’re appointing power of attorney)

- In addition you should list one or more people who you want notified of the application, if you list no one an additional certificate of capacity must be provided

- Registration costs £120 per form. Certain people, including those on means tested benefits and those earning less than a certain amount per year may be entitled to fee remissions, details of which can be found on the site of the Office of the Public Guardian

- The Lasting Power of Attorney must be registered before it can be used. This means that if you want to you can save it until a time when it’s needed. However the advice is to get it registered as soon as you can firstly to avoid the long registration waiting period in emergencies, and secondly because if you’ve made mistakes and it’s declared void it will be too late

- Prior to 2007 it was possible to make Enduring Power of Attorney. This was a simpler document but didn’t include some of the important safeguards against fraud built into Lasting Power of Attorney. It is no longer possible to make an EPA but they are still valid if they were made prior to 2007.

Useful links

- For more information about making Lasting Power of Attorney in England and Wales visit www.publicguardian.gov.uk

- For more information about making Lasting Power of Attorney in Scotland visit www.publicguardian-scotland.gov.uk

- For more information about The Office of Care and Protection and making Enduring Power of Attorney in Northern Ireland visit www.courtsni.gov.uk

- BBC’s ‘How To Have A Good Death’ booklet - download here.

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October 24, 2012

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