A Layman's Guide to Wills and Estate Planning – Part 2 – Power of Attorney.

I think Wills and Estate Planning are often confusing; so here is some clarity.

Today we are going to look at Powers of Attorney.

Powers of Attorney are a surprisingly large topic, so I am going to break it down into sections and cover that section in the post and article.

A Lasting Power of Attorney replaced Enduring Power of Attorney and introduced new classes and levels of Attorney.

I will take an take an overview of the Lasting Power of Attorney. The process is bureaucratic and a bit of a faff but preparation makes is relatively painless.

What is a Power of Attorney (POA)?

There are 3 different types (classes) of POA.

  1. A Health POA – for managing your own personal health.

  2. A Personal Wealth POA – for managing your personal wealth.

  3. A Business Wealth POA – for managing your business affairs.

So what does a POA help you to do?

Basically a POA allows you to appoint someone to manage and make decisions about your Health, Personal Wealth or Business Wealth as if they were you; while you are alive. When you die they cease to have this authority and your Will or Trust takes over.

When it comes to the wealth POA they act as if they are the owners of that wealth but some restrictions can be put in place.

Once again; as someone who helps to deal with Elder Financial Abuse the POA's are both good and bad.

Bad in that someone can act with freedom, no management and no oversight and so if they behave badly and with bad faith; they can often get away with it.

This means that they can steal, lie, enter into contracts and generally have a good time with someone else's money with little real chance of getting caught.

The POA's are good when they are managed properly, have ongoing oversight and management and can relate to the changing lifestyle and needs of the person concerned.

This is a service what we provide with our Independent Lifestyle Management Advocates. This service allows ongoing contact with the client and the changing lifestyle needs and situations they experience are fed back through the Advocate. We are the only ones providing this service as we created and developed it.

POA's are a two stage process.

The first stage is that you have to complete the government form to apply for the correct POA.

You can take out just one POA or more than one. Each POA needs a separate application.

Each person has to do their own POA; so a husband and wife will each do their own.

There is a degree of flaffing around with POA's but this can be reduced by planning things in advance. We can help with these.

In another posts I will look at the specifics of each type of POA and how they can be important and useful.

There are a number of issues that have to be thought through when doing these. The person preparing the forms should take you through these and make notes for later reference and guidance when operating the POA.

So the forms are completed and the required people have signed them in the right order.

As you complete the form you are asked about the person or persons who will act as your Attorney. This is the person who will act as you and make decisions as you. You need to consider this point carefully and not take the first person offered.

Many people will choose family members, friends or the person who has written the form may suggest themselves.

The form allows for more than one Attorney. However; the practicality of situations may require only one practical decision maker. This is a choice you have to make and the person doing the POA should be able to help you reach the decision that is right for you.

Family members are often a free option but the reality is that many family members have stolen from people because their is no management and no oversight and they are provided with easy access to large sums of money.

With careful planning you can minimise the risk and our Service can help you with this.

The reality is that whoever acts as your Attorney will need to meet you, understand your situation and understand your wishes for the POA.

People often think of the money POA and forget the Health POA but each has benefits. I will explore those in the other posts.

So what should you pay for a POA?

When you prepare a POA it then has to be sent off and registered. This is phase two of the process. Although your POA is done it is not legally valid until it is registered. You will be notified when this occurs.

Currently the cost to register each form is £82.00

The real cost of preparing the POA will vary. Personally I would avoid those who are selling POA's below the real costs of production or offering them free as you may well pay later.

A lot of people want to get control over your wealth and a POA is a good way to do so.

Depending on location and issues to be dealt with I would think about £300 to £500 should be a fair fee for the time, experience and knowledge required to do this. The whole thing should be able to be dealt with in one sitting if your preparations are right and everyone involved is available; this will keep the cost down.

If you decide to use an Independent Lifestyle Management Advocate there will be an ongoing annual charge and a professional fee when they are dealing with Attorney business.

Fees and charges are disclosed and agreed and written into the POA forms and registered with the government body.

The amount of involvement that the Attorney will have with the client does vary. Using our Advocate means that they will have more involvement and for a longer time. This become important when key decisions have to be made and someone has to take your corner and fight for you.

At the end of the day that is what the job of the Attorney should be about. Someone to take your corner and to fight for you; not someone who simply wants to dip into your wealth.

If you already have a POA and appointed Attorney you can change them when you want to or add to them. If you decide to do this make sure that you have a new Attorney agreed before you cancel the old one.

Remember; that Free advice at this point can be very expensive if something goes wrong; so take care.

If you want our help with security, management and oversight then please contact me.

I work across England and can be contacted on 07787 503646 and ask for David Sheridan. ©