Estate Planning and Powers of Attorney

In the realm of estate planning, Powers of Attorney (PoA) play a pivotal role in managing your affairs when you are unable to do so yourself. This legal document grants another person the authority to act on your behalf in various matters, including financial, health, and general welfare.

At Continuum Wealth, we provide comprehensive guidance on integrating Powers of Attorney into your estate plans, ensuring that your wishes are upheld no matter the circumstances.

Estate Planning and Powers of Attorney

Safeguarding Your Future Decision-Making

 

Understanding the Types and Uses of Powers of Attorney

Lasting Power of Attorney (LPA): An LPA is crucial within UK estate planning. It remains valid during your lifetime until death, unless revoked.

There are two types of lasting power of attorney:

1. Lasting Power of Attorney for Health and Welfare: This allows the appointed person to make decisions about your health care and daily routine.

2. Lasting Power of Attorney for Financial Decisions: This grants the attorney the power to manage your finances and property.

Enduring Power of Attorney (EPA): Before the introduction of LPAs, EPAs were used. Although no longer available to be made, existing EPAs are still valid and cover decisions about financial affairs only. Registering an enduring power of attorney remains a key process if the donor has started to lose mental capacity.

Ordinary Power of Attorney: This is generally used for short-term situations, such as handling financial affairs over a brief period when you might be out of the country.

General Power of Attorney: Covers broad activities and decisions, typically financial in nature, but it’s only valid while you have the mental capacity to make your own decisions.

Setting Up and Using Powers of Attorney

Creating a power of attorney involves selecting the right type for your needs, completing the necessary power of attorney forms, and registering the document where required, especially for LPAs and EPAs. The process includes:

  • Understanding the power of attorney cost, which varies depending on complexity and whether you use professional help.
  • Deciding on joint and several power of attorney setups, where you appoint more than one person and specify how they must cooperate.
  • Getting the power of attorney paperwork witnessed properly to meet legal standards.

Duration and Revocation of Powers of Attorney

A lasting power of attorney continues until the donor's death unless revoked. Revoking power of attorney must be done while you still possess mental capacity. For EPAs, it’s crucial to register the power of attorney if the donor is losing mental capacity, which continues its effectiveness.

Power of Attorney and Estate Planning

Incorporating a power of attorney into your estate planning ensures that someone you trust can manage your financial affairs or make health care decisions if you become incapacitated. This is particularly important for individuals planning for possibilities like dementia with a power of attorney when dementia is diagnosed, ensuring decisions can still be made in their best interest.

Choosing and Appointing a Power of Attorney

The choice of whom to appoint as your attorney should be considered carefully. The appointed attorneys must act in your best interests, avoiding abusing power of attorney. They should understand their roles, from using a power of attorney for health care to managing complex financial transactions.

Legal Guidance and Professional Assistance

At Continuum Wealth, while we do not draft Powers of Attorney, we provide expert advice on how they fit into broader estate plans, including their interaction with wills and trusts. We can guide you to trusted solicitor power of attorney services that specialise in drafting and registering these documents.

Summary

Powers of Attorney are essential tools in estate planning, offering security and peace of mind that your affairs, both financial and personal, will be handled according to your wishes if you are unable to do so yourself. With the right planning and advice, setting up a power of attorney can be a straightforward process, safeguarding your future decisions effectively.

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Estate Planning and Powers of Attorney FAQs

While Continuum Wealth does not draft Powers of Attorney, we provide expert advice on how they fit into your broader estate plans. We guide you to trusted solicitors who can draft and register these documents, ensuring they align with your overall financial strategy.

A Power of Attorney can be revoked at any time while you still have mental capacity. You need to notify your attorney(s) in writing and inform the Office of the Public Guardian if it’s an LPA or EPA.

Choose someone you trust implicitly, who is capable of managing your affairs and acting in your best interests. Consider their ability to handle financial transactions, their understanding of healthcare needs, and their willingness to take on the responsibility.

To set up an LPA, you need to:

  • Choose your attorney(s).
  • Complete the relevant LPA forms.
  • Get the forms signed by a certificate provider who confirms you understand the document.
  • Register the LPA with the Office of the Public Guardian.

An EPA, created before the introduction of LPAs, covers financial decisions and remains valid. Unlike LPAs, new EPAs cannot be created, but existing ones are still effective. EPAs must be registered if the donor starts to lose mental capacity.

The main types of Power of Attorney in the UK include:

  • Lasting Power of Attorney (LPA): There are two types - one for health and welfare, and another for financial decisions.
  • Enduring Power of Attorney (EPA): Covers financial decisions and is still valid if created before LPAs were introduced.
  • Ordinary Power of Attorney: Used for short-term situations and is only valid while you have mental capacity.
  • General Power of Attorney: Broad in scope, typically financial, and valid only while you have mental capacity.

If you become incapacitated without a Power of Attorney, your family would need to apply to the Court of Protection to appoint a deputy to manage your affairs. This process can be lengthy, costly, and stressful, emphasising the importance of setting up a Power of Attorney in advance.

Feel free to reach out to Continuum Wealth for more information on incorporating Powers of Attorney into your estate planning. We are here to provide the guidance and support you need to ensure your future decisions are safeguarded.

A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint someone to make decisions on your behalf. There are two types:

  • LPA for Health and Welfare: Covers decisions about your health care and daily routine.
  • LPA for Financial Decisions: Covers decisions about your finances and property.

A Power of Attorney is a legal document that grants another person the authority to act on your behalf in various matters, including financial, health, and general welfare. It is crucial for managing your affairs if you become incapacitated.

The cost varies depending on the type of PoA and whether you use professional help. There is a registration fee for LPAs, and additional costs may apply if you seek legal advice or assistance in completing the forms.

If the donor is losing or has lost mental capacity, the attorney must register the EPA with the Office of the Public Guardian. This involves completing the registration forms and notifying the donor and their close relatives.

Incorporating a Power of Attorney into your estate planning ensures that someone you trust can manage your financial affairs or make healthcare decisions if you become incapacitated. This is particularly important for planning for conditions like dementia.

 

Note: This page is for information purposes only and should not be considered as financial advice. Always consult an Independent Financial Adviser for personalised financial advice tailored to your individual circumstances.