According to statistics, one person in the UK develops dementia every three minutes. When this happens, and you don’t have a plan, your relatives can’t walk into the bank and access your capital even if it’s to pay for your hospital bills or in-house care.
Unless you set a Power of Attorney1 (POA), your spouse or partner would have to apply through the court, which can be a tedious and expensive process.
So, how can you set up a Power of Attorney, how much will it cost, and how do the rules and regulations differ in Scotland and Northern Ireland?
Here’s a detailed guide to help you navigate the world of POAs.
What’s the Power of Attorney?
Well, a power of attorney, or POA, is a legitimate document that permits your close relative or trusted friend (attorney) to make decisions and act on your behalf as the donor. It’s a pretty straightforward process and provided that you’re aged 18 and above, you can set up at any time.
Since it’s a significantly giant leap, you might want to get some advice from a reliable and unbiased solicitor who’ll walk you through all the POA details.
Setting up power of attorney is a brilliant idea, especially if your health is detonating and can’t run your estate as efficiently. So, the attorney will help you with either:
- Temporary situations – if you’re in the hospital or have travelled abroad from health purposes, the attorney will help you run the everyday tasks like paying utility bills, among others
- Long-term situations – if you, for instance, want to plan for the unexpected or have been diagnosed with dementia (and you lose the mental capacity to make decisions in the future) the attorney will take over and run the estate on your behalf
Types of Powers of Attorney
There are various types of powers of attorney. They include:
Ordinary Power of Attorney
It’s for temporary circumstances. If you lose mental capacity2, the ordinary or general POA will be considered invalid.
Lasting Power of Attorney
The Lasting Power of Attorney3 (LPA) is designed for the long haul. You set it up if you’ve been diagnosed with, or fear that you might develop an illness that will interfere with your ability to make informed decisions in the future. You have to draw it up when you’re still capable of making decisions yourself, and the document will have to be registered with the Office of Public Guardian4 before your attorney can use it.
Enduring Power of Attorney
The Lasting Power of Attorneys replaced the Enduring Power of Attorney5. Nevertheless, if you registered for an EPA before 1st October 2007, then it should still be valid. The EPA covers decisions about your estate and financial affairs and comes into effect when you lose mental capacity, or if you need someone to act on your behalf.
What Happens When You Don’t Set Up A Lasting Power of Attorney?
Suppose you don’t have an LPA or have the Ordinary Power of Attorney and lose the mental capacity to make decisions for yourself. In such a case, anyone willing to handle your affairs will have to make an application to the Court of Protection, for the Deputyship Order6. ‘If the court approves the application, the said person, will then become ‘the deputy.’
Nonetheless, this can be a tedious and costly process, so if you think your health will worsen; it’d be wise to consider setting up the LPA.
Can Anyone Be An Attorney?
No. An ‘attorney’ has to be aged 18 and above (or 16, in Scotland). They also have to prove that they can make decisions on your behalf and should be someone who knows you well. Most people tend to choose their best friend, spouse, relative, child, or a professional they know like a solicitor.
It’s essential that you trust the ‘attorney ‘and you’ll also have to check if they’re happy to make the decisions on your behalf since it can be a tricky task. They also have a legal duty to make sure that they’re acting in your (donor’s) best interests.
How Do You Set Up A Power of Attorney?
Setting Up An Ordinary Power of Attorney
If you want to set up the OPA, you should contact your local Citizen’s Advice7 or get professional advice from a solicitor as there’s a standard form of wording that you have to use.
Setting Up A Lasting Power of Attorney
To set up this form of a POA, you need to:
- Contact the Office of the Public Guardian to acquire relevant documents and an information package. You also download the forms and fill them online
- You can choose to fill the forms yourself or through seeking help from a solicitor or local advice agency. Getting professional assistance will prevent issues later on, especially if you’re not confident of the process or your affairs are complicated
- Have your Lasting Power of Attorney signed by a certificate provider. The provider should be some who can confirm that you understand it and haven’t been placed under any pressure to sign it. The provider should also be someone you know well or a professional like a doctor, social worker or solicitor
- The Lasting Power of Attorney should be registered with the Office of the Public Guardian before it’s put to use. You have to legally register the LPA when you still have the mental capacity, and it can be utilized during the registration process which can go on for about nine weeks. If dementia takes over but had signed the Lasting Power of Attorney while you still had mental capacity, your attorney will register it on your behalf
Lasting Power of Attorney Benefits
Some of the of setting up an LPA now rather than waiting till you get sick is:
- You can choose now, while you still have the capacity, who will manage your estate when you lose mental capacity in the future
- It’s less costly to do it now rather than have your family make an application to the court
- It’s legally-binding so on one can refute it
- It’ll assist your loved ones in dealing with your affairs quickly and stress-free
- It helps in avoiding issues with access to your bank account to cater to the accumulating bills
- It offers you and your family peace of mind
How Much Does A Power of Attorney Cost?
Well, there’s a mandatory expense of £82 to register for a Power of Attorney (in England and Wales), £81 in Scotland and £151 in Northern Ireland. If you have a low income (if you earn less than £12,000 a year), you can offer evidence so that your Power of Attorney fees can be reduced to £41.
How Do the Rules Differ in Scotland and Northern Ireland?
Power of Attorney in Scotland
Well, the Power of Attorney rules in Scotland work similarly to those in England and Wales. However, instead of the Lasting Power of Attorney, they have the ‘Continuing Power of Attorney ‘which deals with the estate and financial matters of the granter (referred in England as the donor).
They also have a ‘Welfare Power of Attorney ‘that handles the granter’s welfare and health matters. At times, people can opt to combine both, depending on their circumstances.
There’s no standard form in Scotland. Therefore, most people use a trusted solicitor to draw up the POA.
Power of Attorney in Northern Ireland
In Northern Ireland, there are both the Ordinary and Enduring Powers of Attorney. Both can deal with financial affairs, or the donor can request them to only act on their behalf on specific issues.
Like in England and Wales, an Ordinary Power of Attorney loses its power when the donor can no longer make informed decisions.
To use the EPA after the donor loses their mental capacity, the EPA must have to be registered with the Office of Care and Protection. There’s no Power of Attorney in Northern Ireland that offers attorneys authority to make decisions on the donor’s health and wellbeing.
Setting up a Power of Attorney is a considerably significant decision. Therefore, it can help if you talk to your friends or family about it. Moreover, if you’d, instead prefer to get some professional advice, your solicitor or family lawyer can help – even though they might charge you a fee for their ‘two cents’.
Make sure all your documents are certified too!
Well, a power of attorney in the UK is a legal document that allows you to appoint one or more persons, attorneys, to assist you in making decisions.
It’s also a document that gives an attorney the authority to make decisions on your behalf (if you don’t have mental capacity).
Well, the power of attorney costs differs from state to state. However, in England and Wales, the registration fee is £82 for each ‘Lasting Power of Attorney’. Therefore, it costs £164 to register an LPA for your estate and financial affairs – and another for health and welfare.
You might be exempted from paying the fees if you’re on a low income, or you’ll receive specific income-associated benefits.
To apply for a power of attorney in the UK, you can choose to apply online, or contact the Office of the Public Guardian for an application package. You can do so by:
- Post: PO BOX 16185, Birmingham, B2 2WH
- Phone: 0300 456 0300
Yes, you can, provided you understand the process.