None of us likes to think that one day we might not be capable of managing our own affairs, but it’s important to consider who you’d trust to act for you should the worst happen.
Setting up a Power of Attorney means that you can give a friend or relative the power to look after your finances in the event you’re no longer able to do it yourself. If you don’t set one up whilst you have the mental capacity to do so, then your family will have to apply to take charge of your affairs through the Court of Protection, which can be both time-consuming and expensive.
Here, we explain how Powers of Attorney work, and how to set one up.
What is a Power of Attorney?
A Power of Attorney is essentially a legal document in which you state who you’d want to make decisions on your behalf if you couldn’t make them yourself, perhaps because of an illness or accident.
There are two main types of Power of Attorney in England and Wales, a Property and Financial Affairs Lasting Power of Attorney (LPA) and a Health and Welfare LPA, and you can have one or both types if you want. The Property and Financial Affairs LPA covers decisions affecting your property and finances, whilst the Health and Welfare LPA covers medical and other decisions affecting your general welfare.
Someone appointed under a Property and Financial Affairs LPA would be able to pay bills on your behalf, make withdrawals or deposits from or to your bank account, as well as manage your savings and taxes.
If you’ve appointed someone under a Health and Welfare LPA, they can decide whether, for example, you should move into long-term care, and what sort of medical assistance or treatment you receive.
In Scotland, these two types of contract are known as a ‘continuing power of attorney’ and a ‘welfare power of attorney’. There’s also a combined power of attorney which covers both these elements. In Northern Ireland there is only one LPA called an ‘enduring power of attorney’. This covers financial affairs but not health and welfare.
How do you set up a Power of Attorney?
You’ll need to complete the relevant Power of Attorney forms, which are available online from the Office of the Public Guardian website in England and Wales (https://www.lastingpowerofattorney.service.gov.uk/home) the Office of the Public Guardian in Scotland (www.publicguardian-scotland.gov.uk), or the Office of Care and Protection (www.justice-ni.gov.uk/articles/information-enduring-powers-attorney-epa) in Northern Ireland. There is an £82 fee to register an LPA with the Office of the Public Guardian in England or Wales. The fee is £77 in Scotland, or £127 if you’re in Northern Ireland.
A certificate provider must sign your LPA. This can be someone who has known you personally for more than two years, but they cannot be a member of your family or your proposed Attorney’s family, or a business partner. Alternatively, it can be someone with the relevant professional skills to judge your mental capacity, such as a doctor or social worker. The certificate provider’s role is to certify that you understand what you are doing.
You don’t need to use a solicitor to help you set up an LPA, but if you want advice or help, or your affairs are complicated, you may decide to use one.
For more information, get a free copy of the Radio Times guide to Estate Planning, produced in association with Key, or call free on 0808 208 5411.