Power of Attorney | What You Need to Know

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Power Of Attorney

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What Is A Power Of Attorney?
Who Can Grant A Power Of Attorney?
What Does ‘Incapable’ Mean?
What Would Happen If I Don’t Have A Power Of Attorney?
Is A Power Of Attorney Just For Older People?
Is A Power Of Attorney Only Necessary For The Wealthy?
Who Can I Appoint As My Attorney?
How Or Where Would I Get One?
How Much Does It Cost?
What Happens To My Power Of Attorney Once I Have Signed It?
Can My Attorney Use My Power Of Attorney Before I Become Incapable?
Are There Checks In Place To Ensure An Attorney Does Not Abuse Their Powers?
Can I Cancel The Power Of Attorney Once It Is Registered?
Where Can I Get Further Help Or Information?

 

Why Need Power of Attorney?

A Power of Attorney is a bit like holiday insurance: it seems like an unnecessary expense at the time or that you will never need it.  But, when you do, you are glad you have it! You hope that you will never lose the capacity to make decisions for yourself, but in the event that you do, your Power of Attorney allows you to retain a degree of control over your future. You will formally decide who you trust to make decisions on your behalf in a time of need and what restrictions their powers should have.

 

One of the most common regrets that we hear from clients and their families alike is that they did not start planning for their care needs sooner. So, we often work with families who have not made any Power of Attorney arrangements. This is often because families don’t like talking about the ‘what if’s’ of elderly care arrangements, facing their or a loved one’s vulnerability and mortality, or thinking that they are old enough to give this matter consideration.

 

A Power of Attorney is not just for elderly people. We would encourage clients and family members of all ages to think about what they would like to happen if the unthinkable happened. Putting a Power of Attorney in place means that if anything should happen, there is clarity among friends and family on how you would like your affairs to be managed. You will have peace of mind knowing that the person you would trust most to look after you is, in fact, the person with the legal power to do so.

 

What is a Power of Attorney?

A Power of Attorney is a written document appointing and authorising a person of your choice to take actions or make decisions on your behalf in the event that you become incapable of doing things for yourself. The Power of Attorney can be restricted to financial matters only, this is known as a “Continuing Power of Attorney”. Secondly, one can bestow powers to deal with welfare matters only – a “Welfare Power of Attorney”.  The third option incorporates both in the one document and is referred to as: “Continuing and Welfare Power of Attorney”.  You can separate out the powers so that a particular person can only deal with your finances, while another looks after your welfare, or you can vest all powers in one (or more) Attorney. Your Attorney does not need to be a family member.

 

Who Can Grant a Power of Attorney?

Anyone over the age of 16, but there are restrictions if you have been made bankrupt. If relevant, this is something you should discuss with your own solicitor.

 

What Does ‘Incapable’ Mean?

Incapacity is generally regarded as when you are either physically or mentally incapable of understanding and dealing with your own affairs. Your capacity could be impaired gradually as a result of old age or a progressive illness, or suddenly as a result of an accident or sudden onset of illness. A registered and licensed medical doctor will say whether you are incapable or not. We have made a guide to help you spot signs of decline in an elderly loved one, and seek further support.

 

What Would Happen if I Don’t Have a Power of Attorney?

No one has an automatic right to take actions on your behalf without the appropriate legal authority. Therefore, if you do not have a Power of Attorney and are unable to make decisions about your affairs, your family or friends may have to go to court to get the authority to act on your behalf. This is known as Guardianship provisions. At this stage, you would have already lost capacity and you would not choose who is appointed as your guardian.

 

Is a Power of Attorney Just for Older People?

Accidents or illness can happen to anyone, so while Power of Attorney is generally regarded as an “old people” thing, it is a sensible planning tool for people of any age, particularly if there are hereditary medical conditions that may be a factor.

 

Is a Power of Attorney Only Necessary for the Wealthy?

No. While there is an initial cost to set up a Power of Attorney, it’s purpose is not just about looking after your money/property, but safeguarding your welfare in accordance with how you would like to be treated. In fact, it is a very effective tool in ensuring people with less money have an advocate for them in dealing with social work provided care.

 

Who Can I Appoint as my Attorney?

You can appoint anyone you want, so long as they are willing to take on this responsibility, are over the age of 16, and not currently declared bankrupt. This could be a family member or a friend, a solicitor or accountant, or a combination. For practicality, it is usually a good idea to have more than one attorney or maybe what is called a substitute attorney to step in if your original attorney can no longer do things for you. You can appoint someone to deal with your financial matters and someone different to deal with your personal welfare. It is good practice to discuss with the person you want to appoint before on what being an attorney actually involves. It will be helpful if you keep a note of the matters discussed and give your prospective attorney a copy too.

 

Where or How to Get Power of Attorney?

While some stationery stores sell Power of Attorney packs, we would not usually recommend these. Any local solicitor will assist you in drafting a Power of Attorney, provide legal advice on the matter, and any other relevant advice, such as wills and tax planning.

 

Cost of Power of Attorney?

Solicitors will charge you for their services in drafting the Power of Attorney. These fees will often vary from firm to firm, depending on how complex you wish your document to be. To be registered with the Office of the Public Guardian, the Power of Attorney document must include a certificate signed by a practising solicitor or medical doctor. This confirms that you are capable of understanding the consequences of signing the Power of Attorney. Even if you do decide to use a pack or have a go at writing it yourself, you might be charged a fee for this service.

 

What Happens to my Power of Attorney Once I Have Signed it?

The Power of Attorney must be registered with the Office of the Public Guardian before it can be used, even if you are still capable of doing things for yourself. It is to be accompanied by an application form which contains a statement that your appointed Attorney(s) are willing to act on your behalf if and when required. There is also a registration fee payable. Once the Power of Attorney has been registered, your documentation and an authenticated copy, along with a certificate will be returned to you (and to the sender if sent by a solicitor). More details on submitting Power of Attorney for registration and current fees is found on the Public Guardian’s website.

 

Can my Attorney use my Power of Attorney Before I Become Incapable?

Yes, they can help you with your finances if you wish but they cannot make decisions about your welfare until you are no longer able to make those decisions for yourself.

 

Are There Checks in Place to Ensure an Attorney Does Not Abuse Their Powers?

Yes. Guidance as to what is required and expected of Attorneys is provided in the Code of Practice which is available on the Public Guardian’s website. If suspected an Attorney is not fulfilling their duties properly, a request can be issued for the Public Guardian to investigate the matter.

 

Can I Cancel the Power of Attorney Once it is Registered?

So long as you have the capacity to make the decision yourself, you can amend or cancel the Power of Attorney at any time. You should contact your solicitor or the Public Guardian’soffice for further information if you wish to do this.

 

Where Can I Get Further Help or Information?

Your local Citizens Advice Bureau or solicitor will be able to help with issues involving Powers of Attorney. There is also lots of useful information available to you on the Public Guardian’s website.

 

DISCLAIMER: This article has been produced for guidance only and does not constitute legal advice. If you wish to put a Power of Attorney in place we recommend that you consult your solicitor. Copyright © 2017 Bright Care

BrightCare is a family-run business for private in-home companion care services. Find out more about what home care services we offer.

Image © Copyright edar via Pixabay. Licensed for reuse under Creative Commons Licence.

5 Tips For Planning Financially For Long Term Care

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1. Know the real costs and what you might be able to get state help with.

Before you start speaking to providers of care services it is helpful to have a general understanding of what care usually costs and what parts you can sometimes get for free. Check out our home care costs here. Remember the family solicitor or financial adviser will not always know the answers to this question.

The ‘all care is free’ idea is a myth inadvertently perpetrated by the media and the government which is highly misleading to so many families – indeed this is the number one frustration we encounter when working with families.

Generalising to keep things simple:

Care homes

Cost around £800 – £2000 per week. Care homes vary in price depending on quality and location.  At the higher end would typically be a care home which only accepts self-funding clients and does not sell any of its rooms to local authorities.

The costs associated with care home should be split into 3 categories:
  • The hotel costs (around 70% of the costs). These costs are only paid by the local authority if the resident has assets less than £26,000. As such, these days that does not apply to very many people, particularly if they own their own house.
  • The personal care (around 20% of the costs). In Scotland, these costs are always paid for by the local authority regardless of someone’s wealth. These costs are not paid for in England though, hence the political calls for ‘capping care fees’.
  • The nursing care (10% of the costs). This is paid for through the NHS budget and covers the medical components of care like injections, administration of medications and care aspects requiring fully qualified nurses.

If the state is paying for your care, you will have to accept whatever they provide. If you are self-funding then there is a whole world of options out there. Never let anyone tell you what you can and cannot have when you are paying for it yourself.

Care at Home

Cost around £20 – £27 per hour (depending on need)

The costs associated with care at home is also more easily understood if split into two categories:
  • The personal care (around 25% of the costs). The costs connected to this aspect of care at home can sometimes be reclaimed from the local authority in the form of the direct payment or you can opt for the council to deliver this service to you. Personal care includes help getting washed and dressed and basic medication support.
  • The socialisation, getting out and about and household tasks (75% of the costs). Most often this is the part that family and friends take care of, but for someone who does not have loved ones able to assist in these areas, they may need a lot of support. This area is vital when it comes to caring for those with Dementia.

The costs associated with care at home are so variable as you only need to pay for what you need.

2. Consider using a family solicitor to be appointed to take care of your affairs

Given the serious costs associated with good quality care arrangements, money can start driving a wedge between family members and become a motivator in decisions. Disagreements can also occur if one family member feels they are taking on more of the burden or responsibility for the care of a loved one and its impact on them both emotionally and financially much more than others. It has never ceased to amaze us how so often the challenges of caring for older people can be multiplied by families inability to agree on things and how the elderly client’s wishes. Who should be at the centre of all care arrangements can be sidelined!

As such, people should write out a clear will and requests about how they wish to be cared for as early as possible. The responsibility for actioning this should be placed on a neutral and emotionally detached solicitor who will act only on the requests and in the interest of the elderly client.

3. Be wary of care bonds and insurance policies

In our view, the financial services industry has not yet fully understood and looked to build products that can address the financial implications of care fees in later life. There are some products on the market like long term care insurance policies that guarantee a payout after a period of time and effectively limit the amount you would ever have to pay. But as with all insurance policies, getting them to actually pay out can be a mission. It’s like gambling and we all know the casino always wins. Remember lots of older people don’t need any care or support at all ever. You might not quite feel you got your monies worth out of a policy if you were paying into it for 30 years and never got to claim against it.

We would encourage, where possible, families to invest long term in methods which give them full control over funds and how they are used. The watchword here though is ‘long term’!

4. Be wary of ‘Deprivation of Asset’ schemes

Depriving yourself of assets is when you try to gift your estate to your children in order to make yourself appear below the threshold for statutory assistance for care fees. Some may put all their assets into a trust which is protected from a financial assessment. In our view, such moves are a grave mistake, for two main reasons.

Firstly, if you appear to have no money, your care arrangements will be at the mercy of the state. All choice and control are removed and you certainly will not be able to stay in your own home – you will be sent off to a care home of the councils choosing if your needs determine this.

Secondly, local authorities are wise to these actions. If they think they can prove you have deliberately hidden your assets, they will take you to court and sometimes court cases to recoup fees can rumble on even long after someone has died. Expect this to happen a lot more over the next 30 years. Local councils are having their budgets for social care cut all the time and there is more and more elderly people needed cared for. Given the challenges in social care that are upon us for the foreseeable future, one can sympathize with this approach from local authorities.

5. Consult a specialist elderly affairs financial adviser

If you are serious about long term care planning you need to lay out your entire financial situation on the table and analyse how it will shape up over the next 30 years. This includes every need, wish and want you have – even the bucket list!

You’re not obliged to get professional advice when choosing how to finance your long-term care, but in most cases, it’s crucial to do so.

A specialist care fees adviser is recommended. They have a better understanding of the care sector and the associated costs.

A specialist care fees adviser will help you to compare all your options before deciding which one’s right for you. They will also be able to explain all the costs and risks involved with each product. They should be able to help with other things too, like arranging your will or a power of attorney.  We have built up very good quality working relationships with a small handful of high-quality local professionals.  If you would like a local recommendation on a suitable advisor please get in touch.

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