Wills and Power of Attorney
Whilst a potentially difficult subject for most to consider and discuss, ensuring your affairs are in order is arguably the most important aspect of financial planning.
By putting in place some simple arrangements you can make clear your wishes which can alleviate complications after your death and offer reassurance to loved ones faced with making difficult decisions on your behalf.
What is a power of attorney?
A power of attorney is a legal document that allows someone to make decisions for you. Or act on your behalf, if you’re no longer able to or if you no longer want to make your own decisions.
There are a number of reasons why you might need someone to make decisions for you or act on your behalf:
- This could just be a temporary situation. For example, if you’re in hospital and need help with everyday tasks such as paying bills.
- You may need to make longer-term plans if. For example, you have been diagnosed with dementia and you may lose the mental capacity to make your own decisions in the future.
Ordinary power of attorney
This covers decisions about your financial affairs and is valid while you have mental capacity. It is suitable if you need cover for a temporary period (hospital stay or holiday). Or if you find it hard to get out, or you want someone to act for you.
Lasting power of attorney (LPA)
An LPA covers decisions about your financial affairs, or your health and care. It comes into effect if you lose mental capacity, or if you no longer want to make decisions for yourself. You would set up an LPA if you want to make sure you’re covered in the future.
Enduring power of attorney (EPA)
EPAs were replaced by LPAs in October 2007. However, if you made and signed an EPA before 1 October 2007, it should still be valid. An EPA covers decisions about your property and financial affairs. It comes into effect if you lose mental capacity, or if you want someone to act on your behalf.
In Wales and England there are two types of LPA:
A property and financial affairs lasting power of attorney
A property and financial affairs lasting power of attorney lets someone manage all your financial affairs – for example, running your bank and savings accounts, managing your tax affairs, and buying and selling investments and property.
A health and welfare lasting power of attorney
A health and welfare lasting power of attorney lets someone make decisions about your health, care and welfare – for example, what medical treatment you receive and whether you move into a care home.
You can set up one or both.