A power of attorney is a binding legal document, which allows someone you designate to make certain types of decisions and act on your behalf. Powers of attorney are generally used if you are unable to work for yourself or do not wish to act for yourself.
There are many reasons you might choose to do one, including being out of the country or hospitalized for an extended period and need someone to look after your assets while you’re away; or to protect yourself and your assets if you lose mental capacity.
However, many of us put off this work due to, among other things, certain misconceptions.
This article aims to debunk some of the most common misconceptions regarding a power of attorney.
Misconception One: Lawyers, Once Nominated, Can’t Do What They Want
This is one of the main fears people have about giving someone else control of their assets. However, it is totally unfounded as lawyers are heavily restricted in what they can and cannot do.
There are several checks and balances to make sure a lawyer doesn’t abuse their position, including a set of rules about how to register the power of attorney so it can be used.
The first set of restrictions comes from you. When creating a power of attorney, specifically a durable power of attorney, there is an opportunity for you to place as many or as few restrictions on your attorneys. For example, if you are establishing a durable financial power of attorney, to allow our family members to take care of your finances in the event you lose capacity, then you can clearly state in the documentation that while your attorneys can do X, Y, and Z, they cannot they can sell their house, or they must all decide together before spending more than £X.
The second set of restrictions comes from the Office of the Public Guardian, which sets clear rules for how a lawyer must conduct themselves, including preventing them from acting outside of the power granted in the power of attorney and making sure they always act in the best interest of the donor.
Misconception two: You must use the power of attorney at the time it’s made, or you can’t make a power of attorney until you know you’ll need it soon.
Many of us put this job off because we’re not in the position we need it to be in now or (that we know of) in the imminent future.
Unfortunately, life doesn’t always give you warnings, and powers of attorney aren’t just for seniors who may have concerns about dementia. Anything can happen that could cause you to need an attorney right away, including a sudden and unexpected hospital admission, an unplanned trip out of the country, or tragically, an accident that renders you incapacitated.
It is prudent to create a power of attorney long before it is needed, especially a durable power of attorney (designed expressly for a loss of ability).
It is entirely possible to write and sign a durable power of attorney, but keep it until you need or want to use it. This is because for a durable power of attorney to be used, it has to be registered until it is registered, it’s just a piece of paper with no power or purpose, and it can sit in a drawer until needed.
You can easily create and sign a durable power of attorney when you’re 30 and not register it until you need it at age 70.
Misconception Three: You Can Wait Until Someone Loses Capacity Before Making a Durable Power of Attorney
This ties into the previous misconception and is completely wrong. Making this mistake can cost you and your loved one thousands of dollars.
To make a durable power of attorney or a general power of attorney, the person making it must have capacity. There is no way around this. If you lose capacity, you cannot make a power of attorney and your loved ones must apply for what is called a conservatorship of you and your property, which costs over a thousand pounds and takes several months to settle.
Considering you could create a power of attorney yourself for free or use a solicitor for £200 (depending on the company, shop around), it should be obvious that this is the superior document.
It’s also worth noting that if you create an overall power and then lose capacity, your overall power loses all of its power. If you had a durable power of attorney when you had capacity and later lose capacity, your attorneys can file the durable power of attorney with the Office of the Public Guardian immediately and begin helping you with your finances and care.
Misconception four: A power of attorney is for life
This is simply not true.
There are different types of Power of Attorney, Durable and General. Lasting powers (you may have guessed from the name) are usually long-term. However, a general power of attorney is not.
A general power of attorney is a document that you can set up to allow someone to take care of your business while you can’t, if, for example, you are out of the country, hospitalized for a few months, or can’t leave the country. home for a while. A general power of attorney gives another person the authority to act on your behalf for a particular reason, to perform a specific task, or for a specific period of time. As soon as you can manage your affairs again, you can destroy the general power.
Misconception Five: You Can Only Have One Lawyer
The role of attorney is challenging at times, and there is a lot of responsibility.
So instead of putting all that responsibility on one person, you can spread it out by having more than one attorney. This second person is called a joint attorney.
You can designate any number of attorneys in the same power of attorney, and you can specify whether they can act separately or whether they must cooperate and unite to decide. You can have them act together on some issues, such as property sales, but have them work individually on all other issues. There is a lot of flexibility and it is entirely up to you.
Conclusion
In conclusion, there is a lot to consider when making a power of attorney, but it is not a decision that should be put off.
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