Published on: 29th July 2020
More people are submitting a Power of Attorney application, helping to provide security in the future should they not be able to make their own financial and health decisions. If you’ve yet to name a Power of Attorney, it’s an important step to take and can provide you with peace of mind.
Figures from the Ministry of Justice show 5% more Power of Attorney applications were received between January to March 2020 when compared to a year earlier. The increase in Power of Attorney usage has been attributed to more publicity and the introduction of online forms, making the process simpler.
Yet, it’s a step many still haven’t taken.
Naming a Power of Attorney gives someone you trust the power to make decisions on your behalf if you’re unable to, for instance, if you’re involved in an accident or become ill. Contrary to popular belief, the ability to make decisions on your behalf isn’t always permanent and can be given temporarily depending on the reasons.
There are two different types of Power of Attorney. Each gives your trusted person the ability to make different types of decisions on your behalf. Both are important to have in place.
Health and welfare
This covers decisions relating to your health and care, it could include things such as your medical care, moving into a care home and life-sustaining treatment. This would give someone you trusted the ability to make decisions that may affect your day-to-day routine too, such as what you eat, social activities and who you have contact with.
Property and financial affairs
This covers all decisions relating to money and property. This includes day-to-day concerns, such as paying bills, collecting your pension and managing your bank account. It would also allow your Power of Attorney to make big decisions on your behalf, for example, selling your home or investing your money.
You can restrict the type of decisions your attorney can make on your behalf or let them make all decisions.
Why everyone needs a Power of Attorney
As with wills, people often think a Power of Attorney isn’t necessary if you’re young and healthy. But the truth is unexpected things do happen and we don’t know what’s around the corner. You shouldn’t assume that just because you’re married or in a civil partnership that you don’t need a Power of Attorney either, no one has the automatic right to make decisions on your behalf.
Here are three reasons that everyone should have a Power of Attorney in place.’
1. It provides peace of mind
When we think about the future, it’s natural to worry about things that may happen, even if they’re outside of our control. But there are often things we can do to create a safety net and provide peace of mind.
While this might be building an emergency fund to protect from unexpected costs, for health issues, a Power of Attorney can provide peace of mind. You know that a trusted loved one would be able to act on your behalf, should something happen to you.
Putting a Power of Attorney in place is an opportunity to talk with loved ones about what you’d want to happen if you were unable to make decisions yourself. This can be an incredibly difficult conversation to have, but it means you can rest assured that they know your wishes in what can be difficult situations.
2. It offers you security if something does happen
No one wants to think about lacking the mental capacity to make their own decisions, even if it’s for a short period of time. But it does happen and taking steps to plan for the ‘what if’ scenarios can help improve your security long term.
Let’s say you’ve been in an accident and aren’t able to make decisions for several months. A Power of Attorney will be able to make sure your financial commitments are still met, ensuring you’re financially secure once you recover. It’s a process that can make recovery easier.
Where a Power of Attorney takes over making decisions for the rest of your life, they’re in a position to make sure you’re secure in your day-to-day life. This may be using some of your savings to pay for support at home where it’s needed or ensuring you’re getting the medical care you need.
Thinking about losing mental capacity is scary, but the alternative of not having someone you trust to offer support can seriously affect your security.
3. The alternative can be lengthy and costly
If you don’t have a Power of Attorney in place, your loved ones would need to apply to the Court of Protection in order to make decisions on your behalf.
This will come with fees your loved ones will need to pay and can take weeks to put in place. During this time, it can be stressful for those seeking to make decisions on your behalf and you may be left in a vulnerable position while the process moves forward. What’s more, the Court of Protection may make a decision that doesn’t align with what you’d choose, for example, giving someone you wouldn’t have chosen the ability to make decisions on your behalf.
Taking the time to put a Power of Attorney in place now can provide security for both you and your loved ones.
If you’d like to discuss a Power of Attorney in the wider context of your financial situation, please get in touch.