A Power of Attorney grants the ability for someone to make decisions or manage financial matters on behalf of someone else, who is unable to do so. Legally, it grants authority, to a third party, who is then able to make decisions on the grantor's behalf should they lose the mental capacity to make their own decisions.
Power of Attorney can be used to deal on behalf of someone else with many day-to-day business interactions, such as but not limited to dealing with utility companies, banks, or health care providers.
An Ordinary Power of Attorney grants a temporary authority.
That could be for someone else to manage financial affairs on your behalf whilst you are unable to do so.
For example, if you need an extended hospital stay, and will be unable to manage your affairs, an ordinary Power of Attorney may suit you and make life easier for you, and those who support you.
A Lasting Power of Attorney grants authority indefinitely.
Lasting power of attorney is normally used for people who may have long-term illnesses or have begun to show signs of struggles mentally as they age.
A lasting power of attorney will allow for control over finances, and this includes the sale of property, settlement of debts, and the ability to control bills.
The Power of Attorney can only be valid whilst the person giving the authority has mental capacity. Should they lose mental capacity, the Power of Attorney is no longer valid. A lasting power of attorney can only be created whilst the grantor has mental capacity but will be valid indefinitely, regardless of mental well-being. This is why it is called the Lasting Power of Attorney.
There are two types of Lasting Power of Attorney. One gives authority over decisions regarding health and welfare. The other gives authority to deal with the individual's property and finances. These are named appropriately "health and welfare lasting Power of Attorney" & "Property & Financial affairs Power of Attorney". You can choose to make one, or both.
When it comes to seeking advice on the topic of power of attorney, consulting with a financial adviser or a later life adviser can be immensely helpful. These professionals possess expertise in estate planning and can provide valuable insights into the process and implications of establishing power of attorney. They can guide you through the legal requirements, explain the different types of power of attorney available, and help you understand the potential financial and personal considerations involved. By seeking advice from a financial adviser or later life adviser, you can make informed decisions, ensuring that your interests are protected and that your wishes are properly represented through the power of attorney arrangement.
A Power of Attorney grants authority for someone to have control, when dealing with third parties, over someone else's decision-making around health & welfare and property & finance. This is normally because they are unable to do so due to illness or mental capacity. It can be temporary or Lasting.
Ordinary power of attorney - Only valid whilst the grantor has mental capacity and for a temporary period. This is suitable for someone who is going to be unable to deal with their affairs for a while, perhaps if a long hospital stay is required. Lasting Power of attorney - It must be appointed whilst the grantor has mental capacity but remains valid should they lose mental capacity. This is suitable if the grantor has a long-term illness or is beginning to show signs of mental struggles as they age.
The registration fee is currently £82. If you need assistance with the setup and advice about Power of Attorney, you may wish to seek advice and could possibly pay more for this service.
If you do not have a Power of Attorney and become mentally incapable of handling your own affairs, you will not be able to set up one. This would mean nobody else is able to legally make decisions for you. This can make it difficult to pay your bills or make decisions about your care.
A Will determines what happens to your estate after you have passed away. A power of attorney gives authority for someone to have control over your finances whilst you are still alive. The power of attorney ceases when the grantor has passed away. The Will then determines what is to happen with the estate. You do still need a Will even if you have a Power of Attorney in place.