The last couple of years have caused a lot of people to reflect, and consider what will happen in the future when they die and either redraft their will or write a will for the first time to ensure that their loved ones are taken care of and their affairs are settled when they are no longer able to do so.
However, if you would like control over how your affairs are managed whilst you are alive, then there are legal systems that allow you to control what happens to your finances, property and health if you are unable to manage them yourselves.
This is known as a Power of Attorney and can be an effective way to maintain complete control over your treatment and your legal and financial affairs.
What Is Power Of Attorney?
Power of Attorney is a legal document where one person gives another the right to either assist or make decisions on behalf of another person. This person is called an attorney and there can be more than one of them who make decisions either separately or as a group depending on the PoA.
These decisions can vary depending on the PoA agreement but can include managing financial assets, such as bank accounts, investments and property, choosing where they live as well as their medical treatment.
There are generally three kinds of PoA agreements:
- Ordinary Power of Attorney (OPA) – this gives an attorney the power to make decisions whilst the person has mental capacity but needs help to manage their affairs, usually as a result of illness, injury or international travel. These are typically limited to very specific powers.
- Lasting Power of Attorney (LPA) – this gives an attorney the power to make not only financial decisions on behalf of a person but also property and welfare decisions either with permission or if they lose mental capacity.
- Enduring Power of Attorney (EPA) – No longer available after October 2007 but still legally valid if made before them, EPAs give an attorney the right to make decisions about finances and property on behalf of a person.
The former two are the main two types of PoA agreement, and the difference between the two relates to the legal concept of mental capacity.
What Is Mental Capacity?
The Mental Capacity Act 2005 is a major part of PoA agreements and decisions as they often involve determining whether people have the ability to make decisions for themselves.
The main litmus test is that if someone does not understand relevant information, cannot retain it and cannot factor this information into a decision, they do not have capacity. The Act assumes that someone can decide for themselves unless it is proved they cannot.
Setting up a PoA allows you to choose who makes these decisions for you if you lack capacity or at a time you choose.
What Happens Without Power Of Attorney?
Without a PoA agreement in place, if you cannot make a decision at the time it needs to be made, the Mental Capacity Act will allow someone else to make that decision for you.
To do so, they will need to apply to the Court of Protection, which can assess mental capacity, appoint deputies who like attorneys in a PoA agreement can make decisions on a person’s behalf, or give permission for one-off decisions for people who lack mental capacity.
This can be important when it comes to further treatment for a person who no longer has mental capacity, as it can involve depriving tahem of their liberties or treatment plans that would otherwise require their consent.
As such, it is important to set up a Power of Attorney agreement in place, even if it would only come into effect once you no longer have capacity. Some services that offer will writing can also help with PoA agreements.
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