Power of Attorney explained

As we get older, there may well come a time when we lose our marbles. By that I mean we lose what lawyers call the mental capacity to make decisions about our money and our health. For most of our life that is something we take for granted. But the longer we live, the more likely we are to lose it. According to the NHS, about one in 14 over-65s has dementia and that rises to one in six of those over 80. A stroke or an accident can also deprive people of mental capacity. So it is as well to be prepared in case it happens.

After making a will you should also make a Power of Attorney. That simply means giving someone you love and trust the power to make decisions on your behalf if there comes a time when you can no longer make them yourself. You can only make a power of attorney if you still have mental capacity, which is why it is important to sort it now while you still do.

The person who gives the power to another is called the ‘donor’ and the person who gets the power is called the ‘attorney’. Giving someone these powers is a major step. People often choose a husband, wife or partner, or a son or daughter. But it can be a good friend or even a professional such as a solicitor, though they will charge you to do it. You can have more than one attorney to make sure someone is around when needed.

Every decision they take about your affairs must be in your best interests

You must also nominate a person called a ‘certificate provider’. They must sign your application to confirm that you are choosing to do it of your own free will and have not been forced or coerced into making it. This person must be an adult who is not a relative of either you or your attorney and must have known you for at least two years. Usually it’s a professional person such as a doctor, though they may charge. In Scotland you need a doctor or a solicitor. You will also need another person to witness all the signatures, which must all be made correctly in the right order, so it is better if everyone is present at the same time.

Who you choose as attorneys can cause rifts with close relatives wondering why they were not chosen. Sometimes they may challenge the decisions attorneys make in the Court of Protection. It can dismiss attorneys and take over the power to make decisions. It also steps in if someone loses their mental capacity and has not made a power of attorney. It will appoint a person called a ‘deputy’ to do the job. That can be a professional or a relative. The court can be slow and is always expensive so it is best to avoid it if you can. In Scotland, that job is done by the Office of the Public Guardian, which appoints a person called a guardian. In Northern Ireland the Office of Care and Protection will appoint a controller to look after your affairs.

Once you lose your capacity to act yourself, your attorney can step in. But every decision they take about your affairs must be in your best interests. You can also give them the power over your financial affairs before you lose mental capacity if you feel you need help managing them day to day. In finance they may have to deal with trustees who control your pension. Once you lose the power to act yourself you can be left without income if there is no one to do it for you. They can also pay bills, buy and sell property, and make gifts to relatives or friends as you would want. They cannot use your money or property for themselves. It is helpful if you write down your wishes for your money and your health care – for example, drugs or resuscitation – to give them guidance.

In England and Wales, you can make one power to cover property and financial affairs and another to cover your health and welfare. Normally you would make both at the same time. They cost £82 each. In Scotland, the rules are similar: a continuing power covers finance and a welfare power covers health and so on. You can do the two together in a combined power for just £81. In Northern Ireland, an enduring power of attorney only covers finance matters and costs £151. Fees can be reduced if your income is low and people on certain benefits are exempt. So if these amounts are too much for you, make sure to ask about getting them reduced.

In England and Wales, you can now make the power of attorney yourself online without using a solicitor. But you must be confident about filling in forms and following correct procedures, and many people still prefer to use a solicitor. They may charge you £500 or so to do the job but at least you know it has been properly done.

Once the form is completed and signed correctly, you register it with the Office of the Public Guardian and pay the fee. The registration process may take some months. Keep the form safe and then when you do lose the capacity to act yourself, your attorney can get certified copies to deal with your affairs.