Whilst many of us understand the importance of having a Will in place, fewer people realise that setting up a Power of Attorney is just as important. There is a common misconception that Powers of Attorney are only relevant for the elderly. However, life is unpredictable, and unexpected events such as illness, accidents, or sudden incapacitation can occur at any stage of life. A loss of capacity can be temporary or permanent, and it does not discriminate by age. For this reason, we strongly recommend that every adult considers putting a Power of Attorney in place, regardless of their age, health, or personal circumstances.
What is a Power of Attorney?
A Power of Attorney is a legal document that gives another person (or more than one person) the authority to act and make decisions on your behalf. If someone loses capacity and is unable to manage their own affairs, there is no one with automatic legal authority to step in—not even a spouse, civil partner, or close family member.
By granting a Power of Attorney, you appoint trusted individual(s), known as attorneys, to manage your financial affairs and/or make decisions about your health and welfare. Financial powers may include paying bills, managing bank accounts, dealing with property, and handling investments. Welfare powers may include decisions about medical treatment, care arrangements, and accommodation.
Importantly, a Power of Attorney can only be created while you have capacity. Broadly speaking, this means you must understand the decisions you are making, be able to act on them, and retain that information long enough to make an informed choice.
Five Reasons to Put a Power of Attorney in Place
1. It Can Be Used as Soon as Required
Once signed, finalised, and registered with the appropriate authority, a Power of Attorney can be used when needed. With your consent, your attorneys can assist you with financial matters even while you still have capacity. This can be particularly helpful if you are abroad, unwell, or simply require assistance managing your affairs. Alternatively, you may choose to delay the powers so they only come into effect if you lose capacity in the future.
Welfare powers, however, can only be exercised if you lack capacity to make those decisions yourself. Without a Power of Attorney, your loved ones may need to apply to court for guardianship powers—a process that can be lengthy, costly, and stressful at a time when urgent decisions may be required.
2. It Puts You in Control
Granting a Power of Attorney allows you to choose someone you trust to act on your behalf. This ensures that decisions about your finances and wellbeing are made by a person who understands your wishes and values. You can also tailor the document to suit your preferences, including placing restrictions on certain decisions or providing specific guidance to your attorneys.
3. It Is Cost-Effective and Straightforward
Putting a Power of Attorney in place is generally far simpler and more affordable than applying for a court-appointed Guardianship Order. If capacity is lost without one in place, loved ones may face significant legal expenses and delays. Planning ahead helps avoid unnecessary complications.
4. It Prepares You for the Unexpected
While it may be uncomfortable to think about worst-case scenarios, accidents and illnesses can happen at any time. Having a Power of Attorney ensures you are prepared for life’s uncertainties and have taken practical steps to protect yourself.
5. It Provides Peace of Mind
Perhaps most importantly, a Power of Attorney offers reassurance. You and your family can feel confident that, should anything happen, your affairs will be managed by someone you trust, in accordance with your wishes.
If you are thinking of putting a Power of Attorney in place or have any questions, our Personal Law team would be pleased to hear from you.
DISCLAIMER
The content of this page is for information only. It is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Gibson Kerr Ltd accepts no responsibility for the content of any third party website to which this webpage refers. Gibson Kerr Ltd is regulated by the Law Society of Scotland.