What is a Power of Attorney?
A Power of Attorney is a useful document which allows you to appoint specific people (Attorney’s) to assist with your affairs during your lifetime.
Powers of Attorney are often prepared by older clients to provide reassurance that, in the event of failing health, or a diagnosis which could render their mental capacity impaired, such as a diagnosis of Alzheimer’s disease or dementia, that the person they would like to deal with their affairs for them, is able do so.
However, given the unpredictable nature of life, Powers of Attorney are also a sensible consideration for younger clients or people who live or work abroad and require someone to assist with their affairs whilst they are out of the country.
There is often a misconception that your next of kin or close relatives, for example a spouse or partner or children, will automatically be able to deal with your affairs for you if something happens to you and you are no longer able to deal with matters for yourself. However, that is not the case.
If you become incapable and do not already have a Power of Attorney in place, then it is too late for you make a Power of Attorney and the person/people looking to assist you would need to apply to the Court for Guardianship.
Applying for Guardianship can be an uncertain, time consuming and expensive process and, is often an added stress that your family or loved ones do not need if you have just had a serious accident or received a health diagnosis or prognosis which is going to detrimentally affect the remainder of your life.
Making a Power of Attorney now does not stop you from continuing to deal with your own affairs whilst you are still able to do so. As long as you are still of sound mind, a Power of Attorney can also be cancelled or changed at a later date to account for changes in your circumstances or wishes.
What a Power of Attorney covers
Each Power of Attorney is unique to the person making it, but a Power of Attorney can cover a wide range of matters including financial, business and property related matters as well as welfare related matters. Financial matters can cover things like the operation of bank accounts, the payment of bills, the purchase or sale of property or the management of stocks and shares. Welfare matters relate to things like your personal care and medical treatment.
A Power of Attorney is often a very broad document which includes a wide range of both financial and welfare related powers to account for the fact that a person’s future assets, circumstances or care requirements are unknown at the time the Power of Attorney is made. However, it is possible to make a Power of Attorney covering only financial or welfare matters.
It is also possible to make Powers of Attorney to cover only one matter or other very specific matters, for example, the sale of a particular property or business asset, or the signing of certain documentation, if you are living or working abroad and are unable to deal with the matter for yourself for whatever reason.
There also different options about who you can appoint as your Attorneys and the circumstances in which your Attorneys can act. For example, it is possible to specify for financial related matters whether the Attorney can exercise the powers when you still have capacity or whether they can only assist with matters when you have lost capacity. i.e. when you have lost the ability to make sound decisions for yourself. There are also different options about how your capacity is to be determined.
A Power of Attorney is therefore a bit like an insurance policy. You put in place and hope it will never be needed, but it provides peace of mind and reassurance that if something does happen to you in the future, that the people you want and trust to deal with your affairs for you, are able to do so.
If you would like any advice regarding Powers of Attorney or would like to discuss the preparation of a Power of Attorney, please call our offices.