When it comes to end-of-life planning, most of us are woefully underprepared.
Despite worrying about what will become of us when we are old and weak, most of us have left no instructions for when we can no longer care for ourselves.
About 3.4 million people over the age of 75 – about 59 percent – still need to arrange a power of attorney (POA) to take care of their finances and healthcare if they cannot do so themselves, according to research from the investor relations firm Just group.
Stephen Lowe, director of group communications at the firm, said: ‘None of us like to think about our vulnerabilities or the impending mental and physical decline, but managing a family member’s affairs without a power of attorney can be painful and costly.’
Register: Without power of attorney, your family, friends and even your partner may find that they cannot make your wishes come true
A power of attorney is a legal document that names and authorizes someone you trust (also known as a lawyer) to take over your affairs if you are no longer able to do so in the future. Your attorney can handle medical decisions, banking, tax assessments and attorneys on your behalf.
Without power of attorney, your family, friends and even your partner may find themselves unable to carry out your wishes because institutions do not grant them access to your accounts or make decisions for you.
It can only be registered if you have mental capacity. “While we can only hope for the best, we must prepare for the worst,” said Rachael Griffin, tax and financial planning expert at wealth manager Quilter.
If something happens to you without you having a POA, your partner or family member will need to apply to the Court of Protection to be appointed as your ‘deputy’.
This can take four to six months and you will have to pay around €800 plus legal fees, which can amount to a further €1,000. Costs may increase if the court decides a hearing is necessary.
There are two types of powers of attorney and the most common is an Enduring Power of Attorney – known before 2007 as an Enduring Power of Attorney. This gives your lawyer the authority to take over your affairs if you lose mental capacity. The other is an ordinary power of attorney, which gives someone temporary power over your finances, usually if you are admitted to hospital for a period of time or if you move abroad.
An Enduring Power of Attorney (LPA) can cover two areas of your life. One covers your health and wellbeing, and the other covers your property and finances. To be fully prepared for the future you need to have two LPAs covering both areas.
Louise Wright, 52, from Herefordshire, managed her affairs after being diagnosed with stage four bowel cancer. ‘I was most concerned about a durable power of attorney for health and welfare. I didn’t want my family to worry about what the right thing to do for me would be. I wanted my wishes and consent to be clear so that they could confidently make the necessary decisions on my behalf at a critical time.
“The hardest part is deciding who you trust to fulfill your wishes and act in your best interests. For me, this was my husband Andrew and my eldest child. There is also a section on the form where you can add another “attorney” in case one of the originals dies. I thought this was helpful and mentioned my second oldest child.”
“You have to trust your lawyers absolutely implicitly,” says Jade Gani, lawyer and founder of Power of Support – an advice website for those acting as lawyers.
‘They will have far-reaching powers to act and make decisions about your affairs in the same way as you would. You don’t have to mention your family; you can choose anyone you really trust. Furthermore, it does not have to be the same lawyers for both documents. You can have other people acting for your health and well-being rather than your property and finances.”
Also take into account the age of your lawyers. If they are the same age as you, can you be sure that they will still have mental capacity when you need them?
You can download the necessary forms from Gov.uk and it costs £82 for each type you register – there’s one for health and wellbeing and another for finance and property.
If you earn less than €12,000 before tax, you will receive a 50 percent discount on the fee. Once completed, register them with the Office of the Public Guardian. Normally it takes about four months for an application to be registered.
Plans: Louise Wright, left, managed her affairs after being diagnosed with cancer. Right: Amanda Elias has set up a POA for her father
‘I set up a power of attorney for my father, it was very easy to do and so much cheaper than using a lawyer,’ says mother-of-three Amanda Elias, 43, founder of Bravura Cosmeceuticals in Ammanford, South Wales. ‘It takes a few months and if necessary you can activate it online.
‘I’ve been telling all my friends that it’s something they should really look into and something I plan to do myself when my youngest turns 18.’
However, many DIY forms are filled out incorrectly. Nearly 130,000 applications for Enduring Power of Attorney were rejected by the Office of the Public Guardian between 2018 and 2023, according to Quilter’s Freedom of Information data.
The most common reason for rejection was that the forms were signed in the wrong order. Other problems included missing information, failure to provide full names and incorrect witnesses. You cannot use anyone who is related to you or the attorney or where this could be considered a conflict of interest.
When drafting durable power of attorney documents – whether you do it yourself or hire an attorney – be sure to include important additional details. For example, do you use an asset manager to help you with your finances? If you do, it may be worth including in your LPA that you give permission for your lawyer to continue using it.
“The majority of lawyers would not have the experience to invest their loved ones’ assets without professional advice,” says Rebecca Seeley Harris, a lawyer at Re Legal Consulting. The Office of the Public Guardian (OPG) previously required “specific language in the Enduring Power of Attorney to enable the attorney to delegate investment decisions to an investment manager.” This requirement has been removed, but “some financial institutions may still require this.”
“This is not the only case where the financial institutions have ignored the OPG, they have ignored the new digital service and still need the paper document,” Seeley Harris added.
These problems are why it is often wise to hire an attorney to help you. Instructing a lawyer costs approximately £500 to £700 per power of attorney form. Although many will offer you a discount if you set up a health and financial power of attorney at the same time. You may also receive a reduced rate if you combine drawing up a power of attorney with writing or updating your will.
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