Powers of Attorney are hugely important and useful documents, but many don’t understand their benefits and application. In this article, we set out ten good reasons to consider putting a Power of Attorney in place.
Without a Power of Attorney, a legal guardian may need to be appointed to manage your affairs
A guardianship application is a lengthy court process, which is potentially very expensive in the short and long term. Once a guardian is appointed, it is necessary to submit a management plan and annual accounts for the approval of the Office of the Public Guardian in Scotland – all of which adds expense which is unnecessary where a Power of Attorney is in place.
There is no guarantee that an application will be successful, meaning that the guardian appointed may not be the person you anticipate.
Guardianship applications are a stressful procedure, involving medical reports, strict timescales and bureaucracy.
Choice of attorney
By granting a Power of Attorney, you take control of who deals with your finances and makes decisions on your welfare. Without such a document, a guardian may be appointed who may not have been your choice, and could even be a solicitor you don’t know, chosen from a panel. It is best to take control and decide who you would wish to deal with your affairs.
If you wish to appoint more than one attorney, you can decide whether decisions require to be made jointly, by majority, or whether each attorney can act independently.
Distinction between financial and welfare powers
You can decide to have different attorneys for different jobs – attorneys to look after your financial affairs, and attorneys to look after welfare decisions. Many individuals feel that certain people would be a good fit for dealing with financial matters, but not for the more personal welfare issues. In your Power of Attorney, you can separate the powers and appoint individuals you think are best suited to financial and/or welfare matters.
Tailored powers
A well drafted Power of Attorney allows you to tailor exactly what powers you do and don’t want to grant. You can specify the precise powers your attorney has, for example in relation to accessing a copy of your will, authorising gifts to your chosen beneficiaries, and generally managing your affairs. This allows you to remain in the driving seat whilst you are able to make those decisions.
Straightforward process
Granting a Power of Attorney whilst you are capable of doing so massively simplifies the process and costs of having someone look after your affairs.
No lengthy court process, no petitions to court, no uncertainty.
All that is required is two meetings – one to take instructions and assess capacity, and once drafts are prepared, a further meeting to ensure recollection of the first meeting, and signature of paperwork assuming that to be the case.
Once completed and signed, we recommend the Power of Attorney is registered with the Office of the Public Guardian so that it is available for immediate use when required.
Avoids bureaucracy
If no Power of Attorney is in place and capacity is lost, a guardianship application is necessary. The court application associated with that is time consuming and potentially costly. Even when granted, the guardian then has to submit a management plan to the Office of the Public Guardian, and annual accounts, all of which incur significant costs. If you have a Power of Attorney, none of that is necessary.
Can make life easier even where capacity is not lost
Once a Power of Attorney is registered with the Office of the Public Guardian, the financial powers can be exercised immediately unless you have provided that they can only be used once you have lost capacity. It is perfectly possible to decide that you wish the Power of Attorney to be operational in relation to financial and property affairs even if you retain capacity to deal with these matters yourself – over time you may feel that whilst you are still perfectly able, you would simply prefer that family take over dealing with banks etc on your behalf. A Power of Attorney, appropriately drafted, would enable them to do so.
Can amend/revoke as long as capacity retained
Powers of Attorney are not written in stone. For as long as you retain capacity to do so, you can amend or revoke a Power of Attorney. This may be simply to change attorneys as your children get older and you would prefer that they take on the role instead of others you have appointed, or, for example, if you have become estranged from a previously appointed attorney.
Make life easier for your loved ones
When an individual loses capacity, through accident, illness or advancing years, it is a hugely stressful time for family and friends. Where no Power of Attorney is in place, this is only exacerbated. The prospect of a guardianship application and the necessary court processes are the last thing your loved ones need when they are dealing with such a difficult situation. If, while you are hale and hearty, you have considered these issues and put a Power of Attorney in place, that is one less issue for your loved ones to be concerned about.
Peace of mind
Many individuals think that if they have a will in place, they have prepared for all eventualities. That is not the case, as a will only deals with distribution of your estate after your death. A Power of Attorney allows your chosen attorneys to step into your shoes and take over the administration of your affairs, should the need arise during your lifetime.
If you have put that in place, you can provide peace of mind to your family that you have considered the issues and decided who you would wish to appoint, and how you would wish them to make decisions on your behalf.
Setting all of that out in writing can avoid disputes going forward - something which is vital for family relationships. Peace of mind that you have considered and set out your intentions is priceless.
Should you wish to explore further, please contact Donna Brennan in our Glasgow office at donna.brennan@weightmans.com.
For more information about Powers of Attorney in England and Wales see Lasting powers of attorney | Weightmans.