Nobody can predict the future, and there may come a point where you no longer have the mental capacity to make important decisions.
These decisions, such as your finances, property, or your welfare, will need to be made and this is where a Power of Attorney is important. A Power of Attorney, or a Lasting Power of Attorney, is crucial to safeguard you and your family’s future.
This guide will help you understand what a Power of Attorney is, how to assign an Attorney and the responsibilities of an Attorney acting on someone’s behalf.
What is Mental Capacity?
Mental capacity is the ability to make or communicate specific decisions at the time they need to be made. To have mental capacity you must understand the decision you need to make, why you need to make it, and what the likely outcome of your decisions will be. A person lacks mental capacity if their mind is impaired in some way, which means they’re unable to decide at that time.
Someone is thought to be unable to make a decision if they cannot:
– Understand information about the decision they are being asked to make
– Remember information given to them
– Use that information to make a decision
– Communicate their decision by talking, using sign language or any other means
What is a Power of Attorney?
A Power of Attorney is a legal document that enables a person you trust, such as a family member or otherwise, to make important decisions on your behalf. An ordinary Power of Attorney is usually granted for short period and usually cover specific actions the Attorney can make. These decisions can be regarding your health and welfare and/or your financial affairs, should you be unable to make these decisions due to the loss of mental capacity.
What is a Lasting Power of Attorney?
If you want someone to look after your affairs for a long period of time, you can grant them a Lasting Power of Attorney. This is different from an ordinary power of attorney because:
– You can make two Lasting Powers of Attorney. One which looks after both your health and care decisions and one to look after your property and financial affairs
– A Lasting Power of Attorney lasts longer than a Power of Attorney, which is more suited for physical injuries or long-term absences from your home
– The Lasting Power of Attorney lets you choose people to look after your affairs if you lose mental capacity
What are the Different Types of a Lasting Power of Attorney?
There are two types of Lasting Power of Attorneys:
Health and Welfare
This can give an attorney the power to make decisions about:
– Your care needs, for example washing, dressing, eating
– Medical care
– Moving into a care home
– Life-sustaining treatment
Property and Financial Affairs
This can give an attorney the power to make decisions about:
– Managing a bank or building society accounts
– Paying bills
– Collecting benefits or a pension
– Selling your home
Your attorneys can deal with all aspects of your property and financial affairs unless you expressly exclude them dealing with a particular asset.
You can choose to appoint both types at once, or just choose one types.
When to Make a Lasting Power of Attorney?
It is important that you set up a Lasting Power of Attorney sooner rather than later, and while you are still mentally capable of doing so. If a healthcare professional feels you do not currently have the capacity to give consent to important decisions and you have not appointed anyone to make decisions for you, they may make decisions on your behalf.
If you’re married or in a civil partnership, you may have assumed that your spouse would automatically be able to deal with your bank account and pensions, and make decisions about your healthcare, if you lose the ability to do so. This is not the case. Without a Lasting Power of Attorney, they won’t have the authority.
You should also make a Lasting Power of Attorney if you have been diagnosed with, or think you might develop, an illness which might prevent you from making decisions for yourself at some time in the future.
The kinds of illness which might prevent you from making decisions for yourself include:
– Mental health problems
– Brain injury
– Side effects of medical treatment
I have a Will; do I Need a Power of Attorney?
A Will and a Lasting Power of Attorney are very different things. A Will is a document that tells a person that you assign, and third parties, what you want to happen with your possessions and assets after you die. You can leave specific instructions in a Will and a Will protects what you own, but it is specifically created for events after your death. However, a Lasting Power of Attorney is created to protect your interests while you are still alive.
What Happens if I Don’t Have a Power of Attorney?
If you have not set up a Lasting Power of Attorney whilst you were able to do so, and have since lost your mental capacity, others may need to step in to look after your financial affairs. In these circumstances, an application to the Court of Protection is necessary. There are various types of applications that can be made to the Court of protection, but the most common is for a Deputyship Order.
A Deputyship Order is a court order which formally nominates someone to look after your financial affairs. It will provide strict guidance on what the Deputy has and does not have, authority to do. Without either a Lasting Power of Attorney or a Deputyship order no-one has any rights to access your bank accounts, deal with any benefit claims (including a state pension), pay any bills on your behalf or generally deal with your financial affairs.
Can You Appoint More than One Person to Have Power of Attorney?
You can have more than one attorney but for administrative ease we suggest that you have no more than four. You can also appoint replacement attorneys.
Applying for a Lasting Power of Attorney
It’s recommended that you set up both a health and welfare and a property and financial affairs at the same time. Many people do this while reviewing or revising their Will. A Lasting Power of Attorney also has to be registered before it comes into force.
Responsibilities of an Attorney
When you are appointed as an attorney, you are placed in a position of trust, and you must always act in the best interests of the person who has appointed you:
– You can only do the things the donor has authorised you to do and you can’t ask anyone else to carry out any of your duties, unless the donor has authorised you to do so
– You must keep separate up-to-date accounts of the donor’s financial affairs
– When you are acting on the donor’s behalf and have to sign any documents, you should sign your usual signature and add, beneath the signature, the words Attorney for … (donor’s name)
– You must consider any preferences the donor included in the Lasting Power of Attorney
– You must respect the donor’s human and civil rights
As an attorney you cannot:
– Refuse any medicine prescribed by a medical professional
– Make decisions about where they should live if the donor is under a guardianship order
– Make a decision about life-sustaining treatment without checking whether the person has made an advance decision about this
Do I Need a Solicitor?
You don’t have to use a solicitor to create a Lasting Power of Attorney. However, a Solicitor can offer invaluable advice and deal with all aspects of your application. A Solicitor can:
– Give important advice regarding your options
– Draft your applications
– Act as your certificate provider (if we are unable to do this, we will advise you of the options available to you)
– Liaise with your attorneys to provide them with advice regarding the natures of their role and make sure they to sign their documents
– Liaise with the Office of the Public Guardian to register the documents
– Provide you with certified copies of each Lasting Power of Attorney
– Store the original documents for safe keeping
– As with Wills, if we feel that a capacity report from a doctor is necessary, we can obtain a doctor’s report and will advise you of the doctor’s fees which will be in addition to our fees
Lindsey Rawson, head of our Wills, Trusts & Probate department, can help you create an estate plan, help draft a Will, support you to deal with a persons estate when they pass away and get all your affairs in order ready for retirement. She specialises in Wills, trusts, powers of attorney, probate and inheritance tax planning.
Lindsey acts for clients in South Yorkshire and beyond and can be contacted by calling 0114 249 66 66 or emailing email@example.com