Five Reasons Why Granting Power of Attorney is Crucial
Most of us will think about crucial factors such as our Will, and make it a priority to update and review from time to time, or when our circumstances change.
However, a power of attorney is often overlooked and it can be one of the most important things you need to have organised.
In this article, we’ll explain what a power of attorney is, what it means, and why it is essential to consider whether it will be valuable for you.
What is Lasting Power of Attorney?
Lasting Power of Attorney (LPA) is a legally recognised document and determines who has the authority, granted by you, to make decisions on your behalf.
There are many reasons when you might need somebody you trust to be able to take over managing your affairs – for example, if you are unwell, have suffered an accident, or have connectivity or travel restrictions that prevent you from signing a document or representing your own interests.
Here at The Law Firm Group, we can advise on, and prepare, two primary LPA types. One relates to your health and welfare, and the other to property and financial affairs.
You can draw up one LPA document giving authority to a party to act for you, or both.
An attorney can be:
- A friend or relative.
- Your spouse or partner.
- A professional such as your solicitor.
If you would like to create an LPA and need advice about the most suitable attorney, do get in touch.
There will be an obvious choice in a relative or partner who you trust to make the right decisions, for some people. In others, it might be preferable to appoint a professional representative to look after any affairs with the right skill and knowledge.
Why is Granting Power of Attorney So Important?
We’d all like to think that we will be healthy, well, and easily able to manage our own finances and wellbeing for many years to come.
That said, having a contingency plan can be a weight off of your shoulders. If you are unwell, you have somebody you have selected who will make sure your wishes are fulfilled.
There are many different scenarios where not having an appointed attorney can be stressful, costly and time-consuming.
For example, suppose you were unwell and didn’t have an attorney in place. In that case, your family may need to apply to the Court of Protection for a Deputy to be appointed to act for you – this can delay any crucial decisions to your care, and can also be an expensive process.
Here are some of the most important reasons to set up an LPA:
- Managing your finances – if you need urgent care, especially if you are travelling abroad, you will need somebody with authority to approve payments from your bank accounts, communicate with lenders, and authorise remittances to cover bills.
- Collecting pension funds – likewise, if you are unable to collect your pension benefits, you could suffer financially. Having an LPA in place means that your chosen attorney can collect pension benefits on your behalf.
- Medical care decisions – should you be injured or ill, you may need medical care. An attorney can make sound decisions about what care you receive, whether to transfer your care to a private facility, and whether to approve life-sustaining treatment.
- Choices around care home residency – many people move to a care home or supported living facility if they reach a certain age and feel unable to cope independently, or need assistance with day-to-day needs to make them more comfortable. An attorney can make those decisions with you and choose a care facility that aligns with your wishes and needs.
- Selling a property – commonly, if you do move into a care facility or require a different living space, you might wish to sell your home or property to release capital to cover your costs. In this case, an attorney can approve the sale of your home, negotiate on listing prices, and manage the process for you.
As we can see, an attorney can help make the right decisions on your behalf from managing your finances to deciding where you live, appointing healthcare providers to paying your bills.
There are many different options, from whom you appoint as your attorney to what power they have. For example, you can stipulate in what scenarios your attorney will step in, or what events must transpire that will mean their power of attorney comes into play.
Can I Grant Power of Attorney For My Business?
You sure can – business owners will usually have worked extremely hard to build up their company, and will be keen to ensure that, should anything happen, their firm will be protected.
Having an LPA for a business means that, if you were unwell or unable to deal with business matters, your attorney could:
- Approve payment of employee wages, tax bills and VAT liabilities.
- Discharge debts and manage any litigation proceedings.
- Appoint managers or directors to take things over for you.
- Deal with property sales or purchases.
- Sell the business, or wind it up.
A Business Lasting Power of Attorney (BLPA) is slightly different than a private LPA, but in essence, provides the same safety net – that you have chosen who will take care of your business if you are not in a position to do so.
Once you have set up either an LPA or BLPA, it’s also important to review this periodically and evaluate what powers you have granted.
This isn’t only important to ensure you update whom your attorneys are, but to remain compliant with the current documentation style, which is legally valid and easily recognised by banks or lenders your attorney may have to deal with.
If you are interested in learning more about power of attorney, who it is most relevant to, and how it can protect your interests whatever the future may bring, get in touch with The Law Firm Group‘s friendly team to get started.