We all know we should make a Will to ensure our loved ones are protected in the event of our deaths, but what happens if we have an accident, suffer from ill health or from sheer old age. How do we provide for ourselves and our loved ones in those circumstances? Just because a person is a spouse or next of kin of a person who is unable to deal with their financial affairs or make decisions regarding their Welfare, this will not give them authority to deal with these issue on behalf of that person.
Over the past 20 years Powers of Attorney have made the transition from being the Cinderella deed in comparison to a Will, to being looked upon as just as important as one. This is as a result of changes in the law. If a person has life insurance to provide financial assistance for their loved ones, or if they have a Will to provide for the orderly distribution of their estate should the worst happen, we find that in the vast majority of cases when a Power of Attorney is explained to them that this is seen by them as being just as important as life insurance or a Will.
If for any reason a person is unable to look after their own financial or welfare affairs, their attorney could deal with these on their behalf. If a person is in business this may enable another person to continue running their business or to make appropriate decisions while they are unable to do so.
If a person has substantial assets, such as a house, and loses mental capacity it is likely that for these assets to be dealt with on their behalf, it will be necessary if a Power of Attorney has not been obtained to go to Court to appoint a financial and welfare guardian. It will take a number of months, perhaps many, and considerable expense for the guardian to be appointed. Once appointed it is likely there will be substantial ongoing expenses such as an annual insurance policy, the fees of the Office of the Public Guardian, and often solicitors fees in relation to administering the guardianship. These expenses could be avoided by having a Power of Attorney and just as importantly the attorney will be able to act immediately rather than having to wait until a Court order is granted. This gives flexibility and reassurance to the family at times of difficulty.