As we get older, there are a few fundamental ‘financial housekeeping’ steps we can all take that will make our family’s life easier, should anything happen to us. Alongside a will, one of the most important of these is setting up a Power of Attorney.

If you’ve finished work and are enjoying your retirement, the chances are you’ve already taken the plunge and made many of the necessary arrangements for your later life.

But according to the Office of National Statistics (ONS), less than 8% of UK adults have set up a Power of Attorney – a way for others to look after your affairs and make decisions for you, if you lose the physical and/or mental capacity to do so.

Research by the Office of the Public Guardian (OPG) revealed that 75% of people thought that a partner or close relative could automatically make decisions for them if they were unable to. But that’s not necessarily the case – even when you’re married or in a Civil Partnership.

Sadly, illness or incapacity can strike at any time so, arguably, setting up a Power of Attorney is even more vital when you have a young family and dependents to support.

It enables you instant access to bank accounts, to pay the mortgage,  utilities and medical costs

What is a Power of Attorney – and why should I put it in place?

A Power of Attorney (POA) allows you to give a close family member, friend or someone you trust the legal right to make decisions on your behalf. There are two types of POA: an ‘Ordinary’, or ‘Limited’ POA, where you give someone authority over specific financial matters, and a ‘Lasting’ Power of Attorney (LPA), which is a long-term agreement and covers your property and financial affairs as well as health and welfare.

You can only set up a POA for yourself while you still have the mental capacity to do so, which means it’s important to act sooner rather than later.

Still not convinced? We’ve set out the top reasons why you shouldn’t delay making your own arrangements, regardless of your age.

1. It allows your family access to your money without delay, if needed

Most families nowadays need two incomes to cover household bills. If one of you suddenly became physically or mentally incapacitated, the other would need urgent access to your bank accounts and other forms of income to maintain the mortgage, utilities, medical costs etc.

Without an LPA your loved ones might need to register for a deputyship at the Court of Protection and this can be a lengthy process (the Court is there to safeguard you from unscrupulous individuals). An LPA ensures immediate access.

2. It lets someone you trust make health and care decisions for you

A Lasting Power of Attorney also grants your chosen appointee the ability to make quick decisions about your health and medical care. As well as medical treatment, they may also need to make decisions about how you live, where you live, who you have contact with, and even what you eat.

As you can appreciate, you need to be confident that these decisions reflect your wishes, so it’s essential to determine these yourself while you still can and appoint someone who has your best interests at heart.

You choose who you want to manage your affairs

3. It lets you choose your trustees

Power of Attorney means choosing who you want to manage your affairs rather than leaving it to the courts to decide. As long as they’re over 18 and not bankrupt, you can choose whoever you want. But it’s vital you completely trust them, and they understand the responsibility they are taking on.

4. It helps protect you from fraudsters

If you don’t set up a Power of Attorney before your mental capacity declines, you may put yourself at significant risk.

Fraudsters have a way of identifying and targeting vulnerable people with the sole purpose of gaining access to their money. We’ve all read horror stories about this happening to other people – so make sure you take steps to protect yourself and your estate by appointing a trustee that can step in immediately, if required.

5. You can leave specific instructions

You can’t anticipate what will happen if you were incapacitated, but you can make your trustees aware of your overarching wishes – or even specific requests – while you have the capacity to do so. This might be the type of care package you would prefer, medical treatment you do and don’t want, or even people you’d rather not see.

A Power of Attorney is an important foundational part of your overall financial plan

6. It offers peace of mind for you and your loved ones

Setting up a Power of Attorney does not indicate the beginning of your demise – it is simply a sensible, practical and relatively inexpensive way to ensure you and your family are protected.

We’d all prefer to remain in control and capable of our own destinies, but if you are unfortunate enough to face such a situation, you can ease the challenges your family might face by taking this simple step.

Setting up a Power of Attorney is an important foundational part of your overall financial plan. Your Amber River financial planner can help you put the necessary plan in place, and work with your solicitor to ensure all your financial interests are protected.

Get in touch

To speak to one of our team, arrange an appointment or find out more, call 0800 915 0000, or alternatively use our contact form here.