Power of attorney: what you need to know
It’s scary to think about it, but there might come a time when you’re no longer able to manage your own affairs. Whether through illness, injury or old age, there’s a risk that one day you won’t be able to take responsibility for anything from your finances to your care arrangements. This is where the power of attorney comes in.
In this blog, we take a look at this legal arrangement and the reasons why you may want to consider taking advantage of it.
What exactly is it?
A power of attorney is a document that gives another party the authority to act on your behalf under certain circumstances. In order to make one, you must be capable of making your own decisions. When you make one, you are known as the donor and the person you appoint is called the attorney. Almost anyone can be an attorney as long as they’re 18 or over and are capable of making decisions. As well as individuals, trust corporations and solicitors can act in this role.
As it states on the legal website thelawhouse.com, there are two main types of power of attorney. The first is referred to as an ordinary power of attorney and this makes provisions for someone else to manage your financial affairs for an extended period of time. You may want to give someone this power because you’re going to be overseas for a long time, you have a physical illness or you’ve suffered a physical injury. Note that this type of arrangement is not suitable if you’ve been diagnosed with any injury or illness that can result in mental incapacity or if you think you might develop such a health problem.
The other type of legal arrangement is called a lasting power of attorney. This had a broader remit. As well as your property and financial affairs, you can also appoint an attorney to look after your personal welfare in terms of health. Lasting powers of attorney come into effect if you lose your mental capacity. You should consider making one if you’re at risk of developing or you’ve already been diagnosed with an illness that could stop you from making your own decisions at some stage in the future. This could be due to a mental health issue, dementia, substance abuse, a brain injury or another health problem.
Unfortunately, many people put off making these documents until it’s too late. If this is the case, family members can end up having to make decisions that they are unprepared for. Also, they may have to make complicated and costly applications to the Court of Protection to have themselves appointed to manage the relevant affairs. Making a power of attorney can be a simple and effective way to spare your family these problems.
Your next step
If you’d like to find out more about these legal documents, you can research the topic online. It’s also worth speaking to specialist solicitors. They can provide you with additional information and talk you through your options.
Have you, or someone you know, ever had to deal with power of attorney?