Creating a Lasting Power of Attorney in the UK
Power Of Attorney
This specifically refers to the UK – laws will vary by territory.
Should a relative become incapable of managing their finances, being granted power of attorney means you’ll be responsible for their financial affairs, paying their bills etc. This is a difficult step to take and we understand that in all likelihood neither you nor your relative wants to ‘admit’ that it’s necessary.
The Mental Capacity Act 2005
Under the Mental Capacity Act of 2005, anyone who lacks the capacity or has the inability to make decisions will have all their financial affairs passed to the Court of Protection. If this happens you’ll then be in a situation where neither your relative nor yourself have a say in the control of money, but you’ll also be charged a fee for the privilege!
During the first two years of the Court of Protection it handled £3.2 billion in assets and last year charged £23 million worth of fees.
By preparing a Lasting Power of Attorney you can avoid the rule of the Court of Protection being implemented. Additionally I do advise that this is prepared in advance of any illness/incapacity so that it can be simply registered when required. This can help you avoid unnecessary extra stress and government interference at a sensitive time. It also means your relative can be fully involved in the process of preparing it – so it can be done in a way that they are definitely happy with.
The Two Types of Power of Attorney
There are two types of power of attorney – you can appoint someone to be one or both of these.
Health and welfare power of attorney allows the appointment of one or more people to help manage a person’s daily routine and care. This can include meals, clothes, medical care, care homes and decisions on life-sustaining treatment. This can only be used once a person is incapable of making their own decisions.
Property and financial affairs power of attorney allows the appointment of one or more people to manage a person’s financial affairs. This can include paying bills, collecting benefits, selling property etc. This type of appointment can be made at any time.
Who Can and Can’t be Appointed
You need someone willing, able and trustworthy to be your attorney. They can be a friend, a relative, a professional (e.g a solicitor), a husband, wife or partner.
They can’t be under 18, incapable of decision making themselves, or bankrupt (in the case of a property and financial affairs attorney).