Power of Attorney Explained
Being able to make decisions for ourselves is something many of us take for granted. But what happens when this is no longer possible? Protecting your own best interests and the interests of your loved ones is extremely important, which is where a Power of Attorney comes into play. The question is, how can you set this up, and do spouses automatically have such power? Let’s take a closer look.
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. An ordinary Power of Attorney is only valid while you still have the mental capacity to make your own decisions. Lasting Power of Attorney gives someone the power to make decisions on your behalf if you lose the mental capacity to do so yourself.
You may need someone to make decisions for you on a temporary basis. For example, if you’re in hospital and don’t have the energy or mindset to deal with everyday tasks such as paying bills. Longer-term plans may be needed if you’ve been diagnosed with dementia, for example, and you’re likely to lose the mental capacity for decision making.
Do Spouses Automatically Have Power of Attorney?
If you’re married or in a civil partnership, you may have assumed that your spouse would automatically be able to deal with your bank account and pensions and make decisions about your healthcare if you lose the ability to do so. This is not the case. Without a Lasting Power of Attorney (LPA) set up, they won’t have the authority, and there is the risk of strangers getting involved. Sadly, a similar setup applies to other areas of law. For example, if you and your spouse are not listed as ‘joint tenants’ of an asset, then this can make it more difficult to inherit property when one of the tenants dies. You may even need to seek help from a Kent accountant for probate services.
Applying to the Court of Protection
If a person becomes incapacitated before an LPA is made, the spouse can go to court to get legal authority to act on their behalf. However, the outcome is not guaranteed. The Court of Protection will decide whether or not a person has the mental capacity to make a decision. They’ll also make an order relating to the health and care decisions or property and financial decisions of someone who lacks mental capacity and appoint a deputy to make decisions on behalf of someone who lacks capacity. This is then called a deputyship order. You can’t appoint your own deputy and the deputy can only act to the extent of their authority set out by the court. For this reason, it’s really important to have a power of attorney in place, even when married.
If you have Power of Attorney and are looking for sound financial advice to help your spouse, Kent tax advisors can help.
