Power of Attorney: is it helpful? 10 powerful reasons you need one
Thinking of one’s own mortality is never easy, but what is perhaps even harder is contemplating falling ill or having an accident and becoming unable to look after our own affairs.
It’s a situation that, sadly, many have had to face with Covid-19, and one of those people is Kate Garraway, the presenter of ITV’s This Morning. Her husband, 53-year-old Derek Draper, is still suffering the dire impacts of coronavirus after contracting it in March 2020.
But more recently, Kate has highlighted the difficulty she has faced as Derek fell ill without having a Power of Attorney (PoA). A PoA would have allowed the presenter to look after his financial affairs, helping avoid the “financial mess” she now says she is dealing with.
Read on to discover what a PoA is, and 10 reasons why you need to create one.
A PoA allows someone you trust to look after your affairs
Having a PoA allows you to nominate someone you trust to act as your attorney, who then has legal authority to make decisions on your behalf if you lose mental capacity in the future. Generally speaking, “losing mental capacity” means you are unable to make decisions due to impairment.
Alternatively, the attorney can make financial decisions for you if you still have mental capacity, but do not want to.
There are two types of PoA in Northern Ireland:
- Enduring Power of Attorney (EPA) – you appoint someone to manage your property and financial affairs, and it must be set up and registered before it is needed. This is used when you cannot make decisions due to mental impairment.
- General Power of Attorney (GPA) – this gives someone the ability to look after your property and financial affairs for a certain period of time, for example if you go abroad. This can only be used while you still have mental capacity.
We’ll talk generically about a “Power of Attorney” (PoA) in the rest of this article.
1. Puts you in control no matter what the future holds
Because there was no PoA in place, Kate explained to the Times that she could not access Derek’s bank or credit card accounts, medical notes or even their joint savings.
Appointing someone that you trust to look after financial or health matters means you are future-proofing your affairs while you still have the mental capacity to do so. It’s worth remembering that you can restrict the types of decisions your attorney can make, or you can let them make all decisions on your behalf.
2. Creating a PoA now ensures it’s never too late
Making sure you have created a PoA means it doesn’t get forgotten about. One common misconception is that you only need to create a PoA when you become ill or can no longer look after your own affairs. This is incorrect, as you must create the PoA while you can still demonstrate mental capacity.
If you don’t have one by the time you need one, it’s already too late.
Be careful of delaying too. It can be easy to talk about creating one and then not acting upon the conversation. In an interview with the Times, Kate admitted that she and husband Derek had had a “whole conversation” about creating a PoA in case anything happened.
“So, I know we’ve had that conversation. But it isn’t logged anywhere. Or if it is, I can’t find it,” she added.
3. It does not mean giving up control of your finances
This is one of the biggest misunderstandings of a Power of Attorney, as creating one does not mean that you immediately lose control of your financial affairs. For as long as you have full mental capacity, you maintain control of your affairs.
4. Setting a PoA up is more straightforward than you may think
The first step is to request the relevant forms and application pack from the Office of Care and Protection (OCP) or the Law Society of Northern Ireland.
You can make stipulations about the power you want your attorney to have, so for example, you may want them to deal with your mortgage or rent, but not sell your property. Unless you yourself are qualified, we always advise you to take professional legal advice.
A statement from a doctor confirming your mental capacity at the time the PoA is created will be required.
5.You choose who looks after your affairs
A good tip is to choose someone who is younger than you and who lives nearby. Having someone of similar age means they, too, may not be of sound mind when you need them to take over or may be too ill to take on the task.
Having someone who lives nearby also means they are better able to look after your affairs and conduct face-to-face meetings if necessary.
Once you have completed the forms they must be witnessed by specific professionals, such as a barrister, a solicitor, a qualified overseas lawyer, or a licenced conveyancer. Once completed, the PoA must be registered with the Registrar of Wards of Court.
6.A PoA means your affairs can be looked after without delay
If you become incapacitated or lose mental capacity with a PoA in place, the attorney can take over the running of your affairs immediately as long as it is registered.
As Kate Garraway has highlighted, without one your wishes aren’t legally recognised, creating issues for your family as they probably will not be able to deal with your financial affairs.
As she pointed out to the Times, she has been unable to deal with bills and insurance policies as she’s not the named person on the accounts.
7.Creating a PoA need not be expensive
Contrary to what you may think, creating a PoA with a legal professional need not be expensive.
Before agreeing to use any organisation offering to create a Power of Attorney, always speak with your financial planner who will be able to confirm whether their cost is reasonable or not.
8.Without a PoA, dealing with your affairs could become expensive
Without a PoA in place, your friends or family will need to decide the most appropriate person to act as your Controller, which allows them to act on your behalf under the control of the OCP.
However, this can be more expensive than organising a Power of Attorney.
9.Using the OCP will take longer
If there is no PoA in place and you need to use the OCP, it may decide to make a “short procedure order” rather than appointing a Controller. While simpler, this is a limited arrangement.
Either way, the process will not be as quick as if you create a PoA and register it.
10.A PoA provides peace of mind
Once done, a PoA will provide you with peace of mind as you know that someone you trust will be looking after your affairs in line with your wishes, and you have set out the parameters they will have to use when making decisions.
Get in touch
As your financial planners we will always recommend you create a Power of Attorney as soon as possible. Part of our role is helping you to future-proof your lifestyle and wealth, and a PoA can help achieve this.
If you have any questions about creating a PoA, or have concerns about your current financial situation you would like to, please contact us below.
Please Note This article is for information only. Please do not act solely based on anything you might read in this article.