What is a Power of Attorney?
Around 40% of us will have a period of incapacity in our lives. Incapacity with no power of attorney can create chaos – nobody can do anything. So what is a power of attorney? It is basically a legal document in which someone (the granter) appoints a person, or people, of their choice (the attorney/s) to act on their behalf.
When should you think about making a power of attorney?
In an ideal world everybody would make a power of attorney as an insurance policy. If someone loses capacity and there is no power of attorney in place, it can be very difficult for banks, doctors and social workers to co-operate with family members in their best interests. Without a power of attorney you may not be able to act on someone’s behalf without legal authority, even if you are a partner or close relatives. Here are the biggest myths surrounding incapacity:
- My spouse automatically has the right to access my bank account - no they don’t, not unless it is set up beforehand.
- My spouse automatically gets my pension - again, no they do not, not unless it is set up beforehand.
- My spouse has the power to sell jointly owned property to pay for care - no they can’t sell it if one owner is incapacitated with no attorney.
- I have made a will and appointed executors they can do things for me - no they can’t, your executors have no powers until your death.
Types of Power of Attorney
There are three types of power of attorney that will begin when somebody is incapable of managing their own affairs.
Continuing Power of Attorney
This will allow you to take care of the granter’s day-to-day finances – things like paying bills, organising bank accounts, collecting benefits and buying and selling property.
Welfare Power of Attorney
This allows you to make decisions on behalf of someone else about their personal welfare. This could include decisions about care and living arrangements, medical treatment and even clothes, diet and leisure activities. Such powers can only be used if the granter has become incapacitated – a doctor would need to certify that the granter has lost the power to make welfare decisions for themselves.
Combined Power of Attorney
As the name suggests, combined powers of attorney include the power to make both financial and welfare decisions. This is the standard power of attorney arrangement.
So what does a POA involve?
It’s actually really easy to set up. It involves two visits to a solicitor and that is all. A standard power of attorney will grant your attorney power to make both financial and welfare decisions.
It is important to note that granting a power of attorney does not mean that powers are being given away. There is a common presumption that an attorney can take over your affairs. This is not true. Your attorney only has the authority to do things for you when you can’t. You choose someone you trust not to act against your best interests - usually a family member, but not always, it could be a close friend.
Anyone appointed as an attorney must follow 5 guiding principles:
- They must act for your benefit only.
- Any action must involve the most limited intervention.
- Your attorney should follow your known wishes.
- They should take account of carers and others wishes.
- They should encourage and involve the adult.
While in the majority of cases POA work very well, where there are concerns about an attorney there are safeguards in place. The Office of the Public Guardian can become involved to ensure the attorney is not acting outside of their power. It really is very safe.
Granting a POA is not giving up or giving away power. It simply authorises the use of power in a limited way and in certain circumstances only.