If you know that you’re going to find it more difficult to manage your money in the future, it’s a good idea to get some measures in place now so that someone else will be able to do it for you.
If you want to give one or more people the power to completely manage your money and property if you lose mental capacity – that is, if you can’t make decisions for yourself – you have to set up a permanent power of attorney.
The people who will manage your finances are called your ‘attorneys’, and they’re usually friends or family members.
Setting up a power of attorney is a big step. You should make sure you understand all the implications, and We are happy to advise you accordingly.
A permanent power of attorney has different names in different parts of the UK:
- England and Wales: lasting power of attorney
- Scotland: continuing power of attorney, and
- Northern Ireland: enduring power of attorney.
How you get them and what they cover differs slightly, but the principles are the same wherever you are.
You must have the capacity to make your own decisions when you set up a power of attorney. It’s a good idea to get it set up well before you need it. It’s much harder and more expensive for someone to help you with your money and property if you’ve already lost mental capacity. And if you get it set up now, it’s there if something happens to you suddenly like an accident or a stroke.
Setting it up doesn’t mean you have to give up control. Usually the power of attorney will only come into force once it has been registered.
It takes several weeks to register a lasting power of attorney – yet another reason to get it set up early. If you lost mental capacity during those weeks, your attorney would not be able to act for you in the meantime.
Your attorney should be someone you really trust. For most people, that’s their husband, wife, partner, another family member or a close friend. Your attorney could also be a company, for example part of a bank – there would be charges associated with this.
You might want to choose more than one attorney. If you do, you can say whether they need to make decisions jointly (a good idea if you want two opinions on your finances) or whether each can decide things without the other (good for spreading the load).
You should also choose at least one replacement attorney who would take over if your attorney died or could no longer act for you.
The big differences between the types of power of attorney are the decisions they cover – financial ones, or ones about your health and welfare. The options available depend on where you live.
In England and Wales there are two types of lasting power of attorney. You can set up one or both.
A property and financial affairs lasting power of attorney lets someone manage all your financial affairs – for example, running your bank and savings accounts, managing your tax affairs, and buying and selling investments and property.
A health and welfare lasting power of attorney lets someone make decisions about your health, care and welfare – for example, what medical treatment you receive and whether you move into a care home.
In Scotland there are two types of lasting power of attorney.
A continuing power of attorney lets someone manage all your financial affairs.
A welfare power of attorney lets someone make decisions about your care and welfare.
In Northern Ireland there is only one type of power of attorney, an enduring power of attorney. It lets someone manage all your financial affairs, similar to the English property and financial affairs lasting power of attorney. There isn’t a power of attorney that lets someone make decisions about your health and well-being.
We at Daniel Woodman & Co Ltd would be happy to help and guide you through the process of setting up and registering a power of attorney on your behalf.
While you still have mental capacity, you can cancel a lasting power of attorney at any time. The best way to do this is to draw up a written deed of revocation.
If you’ve officially registered your power of attorney you will need to tell the Office of the Public Guardian about the revocation and it will remove the entry from the register.
In Northern Ireland you need to contact the Office of Care and Protection.
After you have lost capacity, the lasting power of attorney can only be cancelled with the agreement of the Court of Protection.
In England and Wales, if you set up a power of attorney before 1 October 2007 it will be called an enduring power of attorney.
You can’t set up this type any more, but an existing one is still valid.
While you still have mental capacity, an enduring power of attorney can be used without being registered – but it must be registered as soon as you start to lose capacity.