8 Things you need to know about a Power of Attorney
Unfortunately, there may come a time when you need someone to make important decisions, whether financial or health and care related, for you. Setting up a Power of Attorney (PoA) is another thing which enables you to be properly prepared for your retirement. Meaning you can enjoy your retirement in peace knowing all your affairs are taken care of.
1. What is a Power of Attorney
Appointing a trusted family member as a Power of Attorney (PoA) means they can make decisions on your behalf, should your mental capacity to make those decisions on your own diminish, due to things such as dementia. There are two different types of PoA: An Ordinary PoA and a Lasting PoA.
2 Ordinary Power of Attorney
An Ordinary Power of Attorney (PoA) is a legal document authorising one or more people control over your finances for a temporary period of time, for example, if you are going to be on holiday or in hospital for a long period of time.
An Ordinary PoA will end if
- You lose your mental capacity
- They specific task mentioned has been fulfilled
- You revoke the power
- If the attorney dies or loses their own mental capacity
3. Lasting Power of Attorney
A Lasting Power of Attorney (PoA) is a more long-term solution. There are two types of Lasting PoA; one for health and care decision; one for financial decisions. This option allows you authorise someone to make decisions for you should you lose your mental capacity to make those decisions yourself.
Special powers can be given to your attorney to decide on life-saving treatments.
Financial PoA’s must keep records of accounts and keep their money separate from yours.
Enduring Power of Attorney
You may have heard this term in the past. An Enduring Power of Attorney (PoA) was replaced with a Lasting Power of Attorney in 2007. However, if you or someone you know has signed an EPA this is still valid today and will maintain its validity until the day the power is revoked or the attorney dies.
What does a Power of Attorney actually do?
A Power of Attorney (PoA) must adhere to certain principles in order to ensure they are acting on your behalf in an ethical manner. They must allow you to make your own decisions as much as you possibly can. They are unable to override any decisions you make that they deem unwise. Other principles that your PoA must adhere to are:
- They must encourage you to participate as much as possible
- They must consider your beliefs and values
- Know about any previous exceptions
Choosing a Power of Attorney
This decision should not be taken lightly. You are putting someone in control of your life and your finances, they must be someone you trust to make the right decisions for you. They can be anyone, a friend, family member, spouse or even a professional such as a solicitor.
You can appoint multiple attorneys in the same Lasting Power of Attorney. Before doing so it is important to consider their ability to work together, compromise and make important informed decisions.
The Problems with a Power of Attorney
Unfortunately, sometimes there can be problems or complications when appointing or even after you’ve appointed your Power of Attorney (PoA). Should this occur you can contact the Office of Public Guardians to submit your complaint. However, at Ready 4 Retirement we will endeavour to ensure that there are no issues with your Power of Attorney.
What happens when you don’t appoint a Power of Attorney
When you don’t appoint a Power of Attorney (PoA) you can rely on the Court of Protection to make your decisions for you, should you be unable to make them yourself. Someone can apply to be your PoAPower of Attorney, although they will be termed a Deputy.
Deputy’s act as PoA’s and have to follow the same principles as Lasting Power of Attorneys.
Ready 4 Retirement offer a Power of Attorney service as part of our retirement package.
Click here or call us on 0800 6446 121 to find out more.