When considering your legal requirements for later in life, or even unexpected incidents, most people think about their wills and sometimes creating trusts for family members or organisations that they may be responsible for. One thing people tend to overlook is powers of attorneywhen really it should be one of the first things to consider.
What is power of attorney?
It is a legal document that gives someone else, of your choosing, the authority to act for you in case you are in some way absent or incapacitated and unable to act. A legal relationship is created, designating you the principal and your appointed person the agent. The Power of Attorney can be for something specific or can cover a multitude of things. You decide whether the powers are broad or limited. For example, if you needed to sell your business but cannot attend the closing in person, you can assign someone else to sign in your absence.
When do the powers of attorney come into effect?
If you have signed the legal document in front of two witnesses and have had it notarised by a professionally trained lawyer, then the Power of Attorney can come into immediate effect. You can provide your agent with the document and request that it not be used unless you are in some way unable to act for yourself, but unless you have specified the exact usage of it, they can use the Power of Attorney from the moment they receive it.
In this instance, sometimes it’s important to set up a Power of Attorney that does not come into effect until an event triggers it, such as an accident that leaves you unable to communicate or unconscious. This can be problematic, as the agent will need to present an affidavit to prove that this event has occurred in order to use the Powers of Attorney. Banks and other institutions may be reluctant to recognise the agent in this instance.
Will I lose control over my money if I provide someone else with Power of Attorney?
No, this isn’t the case. You still have your normal rights over your money and any assets but you are giving the agent the ability to access your money. It is assumed that the person you choose is trustworthy and won’t steal from you, so choose carefully.
If the relationship breaks down between you and the agent, or you have any reason to suspect that they are using their powers to steal from you, revoke the powers of attorney immediately. Notify all banks and institutions that you have done this. You can also take them to probatecourt to discover how and where your money is being spent. You may be able to sue the agent or press criminal charges if it can be proven that they have used the money without your consent.
If you would like to know more about setting up a Power of Attorney call Heritage Will Writers on 01603 894 500.