Is it Important to Have a Power of Attorney?

In this article, Hilltop Finance answers the question “why is it important to have a Power of  Attorney?” and explains how to legally bestow this responsibility and what the role of the chosen individual will be.

The term “power of attorney” refers to a legal process whereby another individual is granted permission to act and make decisions on your behalf should you be incapacitated or otherwise unable to make those decisions yourself.

Individuals granted Power of Attorney must be competent to do so – but otherwise, any consenting adult can be assigned this role, including friends, family members, carers or lawyers.

So, why is it important to have a Power of Attorney? In this article, the team at Hilltop Finance explains how Power of Attorney work and how it could be important to appoint a representative. 

Why Do I Need a Power of Attorney?

Power of Attorney is usually arranged if there is any concern that an individual may lose the capacity to make informed decisions at any point in the future.

You may decide to do this if you are: 

  • Due to undergo high-risk surgery
  • A member of the armed forces deployed overseas – where there is both the potential to become incapacitated due to injury and the likelihood of being unable to manage your financial affairs at home
  • Diagnosed with a medical condition that may result in your decision-making capacity becoming diminished

There are, of course, other circumstances besides those above wherein individuals may opt to arrange a Power of Attorney.

If you lose the capacity to make decisions without appointing a Power of Attorney, the Court of Protection may need to step in to make orders on your behalf, or to appoint a deputy who may do so.

Having a Power of Attorney can provide peace of mind, knowing that your affairs will be in the hands of someone you trust if you cannot manage them yourself. 

In addition to this, it means that you will be able to plan certain matters in advance and communicate your requirements to the individual you choose to act as Power of Attorney – so they can have a clearer idea of the decisions you would make if you were able.

How to Get Power Of Attorney

A Power of Attorney can be appointed by anyone over the age of 18 with a suitable mental capacity. The easiest way to do this is to speak with an advisor who can arrange the documents and ensure your Power of Attorney is legally binding. You can also visit and fill out the relevant forms. This process could take up to 20 weeks to complete.

 What are the Roles of a Power of Attorney?

Powers of attorney may act in different capacities depending on whether you have arranged for Lasting Power of Attorney (LPA), Enduring Power of Attorney (EPA) or Ordinary Power of Attorney.

Enduring Powers of Attorney can no longer be appointed as of 2007, although individuals who were granted this option before then may still act in the same capacity.

So, What are the different roles of a power of attorney?

A Lasting Power of Attorney has legal permission to make decisions on your behalf regarding your financial, property, and medical affairs should you become unable to do so yourself.

Ordinary Power of Attorney transfers financial governance to an appointed individual on a temporary basis but ends if the donor loses the mental capacity to make decisions.

You can also arrange a Joint Power of Attorney, whereby multiple individuals are appointed and must come to an agreement together before taking any action relating to your finances, property or medical care.

There is no way of enacting or “claiming” Power of Attorney without the donor’s permission if they still have the mental capacity to make decisions.

 Next of Kin vs Power of Attorney

A next of Kin is not given any legal right or responsibility to make decisions and is usually a close family member, whereas a Power of Attorney takes control of the decision-making if you do not have the ability to do so.

If you are named as an individual’s “next of kin”, this simply means that you will be kept notified of important developments relating to the person in question – in particular, with regards to their health and any care they may be receiving.

People named as Next of Kin do not have any legal authority over the finances, medical care, or property of the person who has named them. To arrange this, Power of Attorney must be sought.

Arranging for someone to act as a Power of Attorney on your behalf will offer you peace of mind, and ensure that your healthcare, property, and finances are in good hands if you ever lose the capacity to make your own decisions.

To receive expert advice and guidance regarding appointing Powers of Attorney, get in touch with the team at Hilltop Finance today. We will be happy to assist you in any way we can.

Important information: Our website offers information about investing and saving, but not personal advice. If you’re not sure which services are right for you, please request advice from Hilltop’s independent financial advisers. Remember that investments can go up and down in value, so you could get back less than you put in.

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