Are You Prepared For What Lies Ahead?
This article first appeared in the Mearns Press in September 2009.
When it comes to preparing for the future, most of us are guilty of good intentions, but always leave taking any action until “tomorrow”. And we are all aware of the old saying “tomorrow never comes”?
Notwithstanding this, people are thinking more about their future, preparing Wills, considering Inheritance Tax planning etc. Yet, how many of us have considered Powers of Attorney?
What are Powers of Attorney?
Most simply put, Powers of Attorney are documents that give someone (or some people) power to make decisions on your behalf. A Power of Attorney lets the Attorney(s) you appoint look after your affairs, as you would have been able to yourself.
These documents are often to be used when you are incapacitated, either through illness or accident. There are two different types of Power of Attorney: -
Welfare Power of Attorney
A Welfare Power of Attorney allows whomever you appoint as your Attorney(s) (often family members or close friends) to make personal welfare and healthcare decisions on your behalf, in the event that you are no longer able to make these decisions yourself.
Continuing Powers of Attorney
Often referred to as financial Powers of Attorney, these authorise your appointed Attorney(s) to handle your financial and business affairs, from withdrawing funds from you bank account to selling your house and much more. These documents can be tailored to your individual needs.
Who should I appoint as my Attorney(s)?
Who you choose to appoint as your Attorney(s) is an important decision. Most people appoint family members (spouse, children, siblings etc.). However, anyone who is over the age of 16 and is not bankrupt may act. Your Attorney can be whomever you want; for example, you can appoint your solicitor as your Attorney. The most important factor when deciding who you wish to act as your Attorney(s) is to choose one or more people that you trust implicitly, who will carry out matters on your behalf, as you would have done yourself.
You do not have to appoint the same Attorney(s) for both Welfare Powers and Continuing Powers of Attorney. Indeed, people often choose different people to deal with the different aspects of their affairs.
Why should I have a Power of Attorney?
The most important benefit is being able to have a say in how your affairs are handled at a time when you are no longer able to make these decisions yourself. A lot of people assume that Powers of Attorney are for the elderly; we do not like to contemplate a time when we might not be able to look after our own needs, or make decisions for ourselves. And yet, accidents and illnesses happen every day. No one knows what the future holds, but a Power of Attorney is a way of ensuring that even when we can no longer make important decisions for ourselves, there is someone to make those decisions on our behalf. Someone who you trust to make the choices you would have made.
Another significant benefit relates to the cost of having Powers of Attorney as compared with the cost of not having arrangements in order. It costs only a few hundred pounds to put comprehensive Power of Attorney documents in place. However, consider the implications of not having a Power of Attorney, and then due to an accident or illness you are incapacitated. Inevitably, a Court would need to appoint a Guardian to oversee the management of your affairs in circumstances like this. To have a Court appoint a Guardian could easily cost several thousands of pounds at the outset as well as there being significant ongoing expenses. Having a Court appoint a Guardian can also take a long time. There have been cases where it has taken up to 18 months to have a Guardian appointed during which time there will be no one who can make financial or welfare decisions on your behalf. As well as being inconvenient, this could prove expensive.
Be Prepared
None of us like to consider a time when we may be unable to make decisions about our health or our finances. But in being prepared for the future, by having Powers of Attorney in place, you can ensure that you will be living your life on your own terms.
Article compiled by Karen Stewart
Posted by Sharon Clift on Sep 30, 2009
