You have no doubt heard of a power of attorney document and if you are a regular reader you will already know a lot about wills – what they are, how to set them up, and how to find the right executors to carry out your wishes. What you may not know is how a power of attorney can work with (or against) your will. Our focus this month is on these two important documents and how to make them work for you.
What is a power of attorney?
A power of attorney is a legal document. It allows you to choose someone that you trust to make important decisions for you when you are incapacitated for any reason. It can be a short-term solution to a temporary situation, or a longer-term option if you know you will need help in the future. There are a number of different types of powers of attorney, including:
- Ordinary power of attorney. This allows your chosen person to act for you for a certain period of time or for specific issues. For example, you may be going into hospital or be on holiday and you want someone in place who can manage your financial affairs while you are incapacitated or unavailable. This is only valid if you have full mental capacity for as long as you have put it into place.
- Lasting (or enduring) power of attorney. This covers decisions about both your financial affairs as well as your health. It may be that you have been diagnosed with a condition which may affect your mental capacity to make decisions, either now or in the future, and you are giving someone you trust the ability to do so on your behalf. Known as a lasting power of attorney, it replaced the enduring power of attorney in 2007. However, if you had signed one before that date it should still be valid. A lasting power of attorney is the one to put into place if you expect you may have a diminished mental capacity and ability to make decisions at any point in the future.
You can limit your power of attorney should you choose to. For example, it could cover only dealing with certain assets – e.g. your bank accounts but not your property.
Working hand in hand
For a will and lasting power of attorney to work hand in hand, it is recommended to sign both at the same time. That way you can be sure that there are no conflicts – such as your main beneficiary also acting as your chosen power of attorney which in trickier circumstances could potentially lead to a challenge to your will. It also ensures that a will that may have been prepared a long time ago is fully up to date and includes your current wishes for your estate.
For impartial advice on how to set up a will and ensure it works with a lasting power of attorney talk to our team at IWC Probate Services. Find us on 020 8017 1029 or by dropping us a line at firstname.lastname@example.org to set up an appointment or for an initial, informal discussion.