Power of Attorney – Why set it up

A power of attorney is a legal document that allows someone to make decisions for you or act on your behalf, if you are no longer able to or if you no longer want to make your own decisions. The document allows you to decide who would have control over you if you were to be in an accident or have an illness where you couldn’t make your own decisions, i.e. you lack mental capacity.

Power of attorney can be set up for a number of reasons. One could be a temporary situation for example where you are in hospital and need help with everyday tasks such as paying your bills. Another reason may be if you need to make longer-term plans, for example, you have been diagnosed with dementia and you lose the mental capacity to make your own decisions in the future.

You must be 18 or over and have mental capacity when you make your power of attorney.

There are different types of power of attorney and more details about these can be found in our blog: The different types of power of attorney.

What is power of attorney?

Focusing on an ordinary power of attorney, which allows one or more person, known as your attorney, to make financial decisions on your behalf. A limit in the power this person has can be place so that they only deal with certain assets, for example, your bank account but not your home.

An ordinary power of attorney is only valid while you have the mental capacity to make your own decisions. If you would like someone to be able to act on your behalf if there comes a time when you don’t have the mental capacity to make your own decisions you should consider setting up a lasting power of attorney.

What is mental capacity?

Mental capacity means 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 the likely outcome of your decision. Some people will be able to make decisions about some things such as what to have for dinner. But other decisions such as arranging their home insurance may be more difficult.

What happens if I don’t have this document?

If you lose mental capacity to make or communicate your own decisions before setting up a power of attorney, an organisation called the Court of Protection may become involved.

Don’t assume

If you are 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.

If you would like additional information regarding power of attorney, then please get in touch.

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