Generally speaking, most of us assume nothing truly bad will happen to us. Which is fair. No one wants to be walking around in a perpetual state of doom and gloom, imagining some horrible turn of events that may befall them. It’s important to keep positive, especially these days.
But sadly, while focusing on potential catastrophes isn’t a healthy way to live, completely neglecting to acknowledge and prepare for the future can lead to major issues later in life.
In the UK, around seven percent of people over the age of 65 have dementia. That percentage goes up once a person hits age 80, rising to one in six. Dementia wreaks havoc on a person’s memory, problem solving, language and other cognitive abilities. Imagine trying to sort your finances when you can’t remember your security information? Or even which bank you use?
Sadly, that’s exactly the predicament many older people find themselves in. And, while many have friends of family members who kindly step up to lend a hand, it’s not that simple. If a person is unable to make a decision regarding their welfare or finances, someone can’t just make the decision for them. In fact, many banks, once they learn someone has lost their ‘mental capacity’ will freeze that person’s accounts, often locking family members out.
Without the proper provision, someone would have to apply to the Court of Protection – a process which is slow and expensive. And not just the once. They would have to apply every time a decision needs to be made.
So, it makes sense then, to have provision in place, so that someone you trust can be responsible for making those decisions, if you can’t.
That’s where power of attorney comes in.
Power of attorney is a system that allows someone else (the attorney) to make decisions on another person’s (the donor’s) behalf if they become incapacitated. They can be responsible for all decisions relating to finances, property and personal welfare. Or just some decisions.
There are two types of power of attorney:
Ordinary Power of Attorney
This covers temporary incapacity. For example, if someone is ill, injured or abroad for a long time. An Ordinary Power of Attorney grants a person decision making abilities over a person’s property and financial affairs.
Lasting Power of Attorney
If someone loses their mental capacity for an extended period or permanently (such as with dementia), a Lasting Power of Attorney may be granted. Lasting Power of Attorney covers property and affairs, as well as personal welfare, meaning they can consent to certain medical treatments on your behalf. They can be given general authority over all decisions, or have their powers limited.
A limited power of attorney gives restricted rights to a person, allowing them to only deal with certain specified matters on your behalf.
What does mental capacity mean?
Mental capacity is defined under the Mental Capacity Act 2005 as:
Section 2. People who lack capacity
- For the purposes of this Act, a person lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain.
Section 3. Inability to make decisions
- For the purposes of section 2, a person is unable to make a decision for himself if he is unable—
- to understand the information relevant to the decision,
- to retain that information,
- to use or weigh that information as part of the process of making the decision, or
- to communicate his decision (whether by talking, using sign language or any other means).
The decision as to whether someone has lost their mental capacity is not taken lightly. All efforts must be made to help a person make decisions for themselves. If they cannot, their power of attorney must make decisions with their best interests in mind.
A personal welfare power of attorney might have to decide where the donor will live, such as in a care home. They might have to decide which treatment option should be followed for the donor, or even whether to stop life sustaining treatment.
When setting up a personal welfare power of attorney, a donor may choose to make an ‘advance decision’ to refuse future medical treatment. This decision must be upheld and supersedes the power of attorney.
A financial affairs power of attorney can be responsible for all manner of tasks, including paying bills, selling property, and conducting legal proceedings.
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In 2020, TV presenter Kate Garraway revealed that her husband had become incapacitated due to coronavirus. With their car, insurance and many of their credit cards and bank accounts solely in his name, Kate was unable to access their money or refinance their mortgage.
It seems Kate’s situation has raised the profile of powers of attorney, with the Office of the Public Guardian (the office that deals with powers of attorney applications) seeing a steep rise in lasting powers of attorney being set up, compared with 2020.
It’s a difficult topic, and not something anyone particularly wants to discuss. But, we can’t predict the future and, as such, it’s always best to be prepared should the worst happen. Speak to a UK solicitor today to look into setting up a power of attorney.
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