What happens if you don’t have a Power of Attorney in place?

When we think about becoming too ill to make decisions, we often think it won’t happen to us. It’s this mindset that means many of us haven’t put a key provision in place in case something should happen; naming a Power of Attorney. Whilst it’s a task that can seem like an unnecessary hassle, it should be something we all do, and it could prove to be crucial for your security in the future.

What is a Power of Attorney?

First, let’s start with the basics. A Power of Attorney is a legal document that allows someone or multiple people to make decisions on your behalf should you no longer be able to. A Power of Attorney may be used if you lose mental capacity or are involved in an accident, it can be on a temporary basis or the long term.

One important factor to note here is that naming a Power of Attorney must be done whilst you have the mental capacity to make your own decisions. As a result, it’s a step that should be taken before you think you’ll need it.

There are two types of Power of Attorney, you may name the same person on the two types or use different people.

  • A Health and Welfare Power of Attorney will be able to make decisions relating to your medical care, daily routine, moving into a care home and life-sustaining treatment.
  • In contrast, a Property and Financial Affairs Power of Attorney will have the power to make decisions related to bank accounts, paying bills, collecting a pension or selling your home. It’s important to keep in mind here that a spouse or civil partner doesn’t have the automatic right to deal with your bank accounts.

A Power of Attorney is essentially a legal document that names someone you trust to make decisions based on your behalf if needed.

Why is naming a Power of Attorney important?

What happens if you don’t have a Power of Attorney in place highlights why it’s such an important document.

If you lose the capacity to make your own decisions and don’t have a valid Power of Attorney, loved ones can apply to the Court of Protection to be able to do so. The Court of Protection can make an order relating to health and care decisions, as well as property and finance ones. However, naming a deputy to act on your behalf can often be a lengthy and complex process.

It may mean you’re left in a vulnerable position whilst loved ones apply to the Court of Protection or that essential bills are unpaid because they can’t access your bank account. What’s more, as you haven’t named the deputy, it may not be the person’s you’d prefer to be making decisions on your behalf.

The cost of applying through a Court of Protection is also likely to be significantly more than naming a Power of Attorney. You can expect initial application and court fees to amount to around £1,000, and you’ll also have to pay ongoing supervision fees, which can be between £35 and £320 annually.

In short, loved ones applying through a Court of Protection can be time-consuming, costly and may not align with what you want.

How to set up a Power of Attorney

Unfortunately, we never know what’s around the corner and whilst Powers of Attorney are more commonly associated with elderly people, it’s just as important to have one at earlier stages of your life too. The good news is that setting up a Power of Attorney is relatively easy:

  1. Contact the Office of Public Guardian to receive the necessary forms. These can be sent to your home, downloaded from the website or filled in online.
  2. Fill in the above firms. You can either do this yourself or with the help of a solicitor or local advice agency. Working with a professional will cost you, but it can help prevent issues in the future, particularly if your affairs are complex.
  3. Your Power of Attorney forms must then be signed by a certificate provider, who confirms you understand what you’re signing and haven’t been put under pressure to do so. A certificate provider can either be someone you know well or a professional, such as a doctor or solicitor.
  4. To be valid the Power of Attorney must be registered with the Office of Public Guardian. There is a fee of £82 to register it, you will need to pay this for each type of Power of Attorney. It takes around nine weeks or a Power of Attorney to be registered and it can’t be used during this time.

Power of Attorney and your financial plan

A Power of Attorney isn’t something you should be doing in isolation either. It’s also an opportunity to write or update a will if necessary and think about how your capital and assets will provide for you in later years if needed. Setting up a Power of Attorney should be one component of securing your future, in terms of finance and lifestyle.

Understanding other aspects of your financial plan can give you confidence and a chance to speak to loved ones that will make decisions on your behalf about what your aspirations, preferences and concerns are. If you’d like to discuss how a Power of Attorney fits into your wider plans, please get in touch.

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