If you worry about what would happen to your finances if you are ever unable to take care of them yourself, it is a good idea to consider setting up a lasting power of attorney. This kind of legal arrangement can be made right now while you are still able to chart the course of your own finances, but it could end up protecting you in any catastrophic event that puts your mental health in jeopardy. To learn more about lasting powers of attorney for your finances, keep reading.
When it comes to powers of attorney, there are two primary types for handling a donor’s finances. An ordinary power of attorney grants someone permission to make financial decisions on your behalf, even while you’re still able to make those decisions yourself. Some people use this arrangement to create a power of attorney while they are not in the country or while they are physically ill. However, this kind of power of attorney usually ends at a specified time, and in every case, it is not valid once you are mentally incapacitated.
If you’re planning for the future and want to safeguard your finances in case you are unable to make decisions, you will want to create a lasting power of attorney (formerly known as an enduring power of attorney). This document will give the person of your choice the right to make decisions about your money, your bills and your estate in the event that you cannot. Durable powers of attorney are usually helpful in cases in which the donor has suffered from a health condition such as a stroke or dementia. It can also be used if you sustain injuries, such as from a road accident, that leave you mentally unable to look after your own finances.
An attorney will have access to your financial information, including any mortgages, loans or other bills. He or she will be able to decide whether and when is best to sell your property or invest your money. The attorney will also handle more mundane tasks, such as paying your bills regularly.
Because of the broad power that can be granted to an attorney, it is important to choose yours wisely. Many people choose a family member, such as an adult son or daughter, to become their lasting power of attorney. However, it is not uncommon to choose someone outside of the family, such as a trusted friend or even a family lawyer. The most important factor to consider is that the attorney should be someone who has demonstrated his or her ability to make wise financial decisions; therefore, your designated person to become attorney cannot be someone who has recently filed for bankruptcy.
Establishing a lasting power of attorney is an easy process that you can begin by contacting the Office of the Public Guardian. However, if you prefer to have help, a solicitor can also walk you through the process of filling in the forms you’ll need to register your attorney.