When to give power of attorney
For years, the worry of cancer was one of the UK’s biggest health concerns. Now, another devastating disease has taken its place at the top of the list of diagnoses we all dread – dementia. Over 800,000 people in the UK now live with dementia, and the indicators are that the number of patients with this life-shortening condition will grow.
A diagnosis of dementia doesn’t just affect the patient, but the entire family too. In its latter stages, the dementia patient will rely on family members and carers to look after their affairs, from everyday things like eating, getting up, and bathing, through to those long-term considerations such as wills, financial affairs and bill payment. It is at this point that one or more family members can be given power of attorney over a dementia sufferer’s affairs, to help take care of the patient’s affairs.
What is power of attorney?
Granting someone power of attorney over your affairs means that you hand over the power to make decisions on your behalf to someone else. This is often a family member or solicitor. There are two types of power of attorney – one to handle property and financial affairs, and another for health and welfare issues. The same person(s) can act on your behalf for both types, or you can have two different sets of people to take care of each area individually.
The lasting power of attorney for your property and financial affairs means that one or more designated individuals of your choosing can make such decisions on your behalf. They will deal with paying your rent or mortgage, council tax and other utility bills, managing your bank account and savings accounts, and collecting benefits or pensions. They will also be responsible for ensuring that the money is only used in such a way that it benefits you.
An attorney responsible for health and welfare only has power to make such decisions if you have lost the mental capacity to make your own decisions on things such as care, medical treatment, and moving into a care home.
Who can be an attorney?
Whomever you hand the Power of attorney too, it is crucial you not only know them very well but completely trust them. In most instances, the person taking on the mantle of attorney is a close family member, but professionals such as solicitors and accountants can also be given that responsibility. However, you need to bear in mind that if you do ask a professional to do it for you, they will charge for their time. As dementia progresses, they may be called upon more frequently to act in their client’s interest, which can increase the costs considerably.
Appointing a replacement attorney
You can also appoint someone to act as a replacement attorney, if your first choice is unable or unwilling to continue in the role.
How can I be sure they’ll carry out my wishes?
This is always a difficult question, as it can throw up some very subjective replies. This is why it’s often best to appoint two attorneys (for each type of lasting power) and to consider ordering them to act ‘jointly’. This will mean that there are always two signatures required for documents and for important financial pay-outs such as mortgage repayments, care home payments, and other financial decisions. This agreement can be flexible, and you can arrange that your attorneys also act independently on minor matters.
The guidelines of the Mental Capacity Act
Once you have appointed your attorneys, they are bound by the Mental Capacity Act, which means they must always act in your best interest, consider your previous and current wishes, and must ensure that all your money is kept separately from their own. An attorney cannot put your money in their account to ‘look after it’ or make investments with your money that you haven’t authorised. No attorney is allowed to take advantage of a donor of a lasting power of attorney to benefit themselves. Any evidence of this could lead to an investigation and criminal prosecution.
Do I need a solicitor?
A diagnosis of dementia is devastating. However, once the initial shock has passed, it is time to take action to ensure that your affairs are in order and that you are looked after properly. What you don’t want is the worry of financial issues and questions about your care causing you any more distress.
You don’t have to seek legal advice, but it is recommended that you ask a solicitor to make sure that any lasting powers of attorney are drawn up properly. It is an important and very powerful legal document, so it pays to talk to an expert to make sure all the forms have been filled in correctly to prevent any issues later.
If you wish to discuss any of the above issues please contact the Private Client team on 01892 526 344
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.