A power of attorney (POA) is a legal document which allows you to appoint a person or organisation to manage your property, financial or medical affairs if you cannot. POA is an important part of private wealth management and is often something discussed during Estate And IHT Planning.
Why might I need POA?
POA is all about appointing someone to act on your behalf if you’re no longer able to, or no longer want to make your own decisions. This might sound daunting, but there are many reasons why you might need someone to make decisions for you.
For example:
- Short-term healthcare. Perhaps you’re in hospital and need someone to help with everyday tasks such as paying bills.
- Long-term help. If you’re recently received a diagnosis such as dementia, appointing someone to help you when the condition gets worse could give you peace of mind.
- If you travel a lot or have other commitments that need taking care of with additional manpower.
What are the different types of POA?
There are different types of POA, all with varying levels of control. You can set up more than one if you see fit. These include:
Ordinary Power of Attorney
This mostly covers decisions related to your financial affairs. It’s valid while you have mental capacity and is ideal for temporary situations such as hospital stays and recovery periods. Or if you find it hard to get out and about and want someone to take charge of financial matters that you’re not ready to face alone. You can give ordinary power of attorney to one or multiple people. And you can supervise their actions.
Lasting Power of Attorney (LPA)
LPA includes personal welfare LPA and property and financial affairs LPA. Personal welfare LPA gives your attorney the power to make decisions about your daily routine (including what you should eat), medical care, moving into a care home, who you should have contact with and life-sustaining medical treatment. It can only be used if you’re unable to make your own decisions.
Property and financial affairs LPA gives your attorney the power to make decisions about your money and property. This includes managing your bank accounts, paying bills, collecting your pension or benefits and selling your property if necessary. Setting up an LPA is an ideal way to take control of your future.
Enduring Power of Attorney (EPA)
EPAs were replaced by LPAs in October 2007. However, if you signed an EPA before 1 October 2007, it’s likely to still be valid. An EPA covers decisions about your property and financial affairs. It comes into effect should you lose mental capacity or if you want someone to act on your behalf.
Setting up a POA according to your current or future needs is a good way to gain control of your life, even during the most difficult of times.
