When is it time to set up a Power of Attorney?
Sometimes things happen in life which catch us by surprise. To help deal with these unforeseen circumstances, it is important that we have our legal affairs in order. One key legal document is a lasting power of attorney. Normally enacted for medical or financial reasons, this legal step can provide you with additional peace of mind in knowing that your affairs are in good hands, and lasting power of attorney is just as important as a Will. Let’s take a look at the basic principles behind lasting powers of attorney as well as some of the situations when it might be needed.
What is a Power of Attorney?
Sometimes referred to as “POA” or an attorney-in-fact, this situation involves appointing an individual or organisation to manage your affairs if you become incapacitated. In other words, you are relying upon the knowledge that this representative will be capable of handling your finances if you are no longer able to do so. As we can see, there are a wide range of implications associated with such a move. This is why it is important to know when a POA could be necessary. Let’s take a look at a handful of common situations.
When Might a Lasting Power of Attorney be Required?
There are a number of instances were a POA would be required; perhaps the most common is if you become extremely ill. In the event that you are no longer able to make crucial financial or medical decisions, an individual may be appointed on your behalf. Financial considerations may likewise play an important role. For example, those who are establishing a business for the first time might grant someone this power if they are concerned about making important fiscal decisions. The same holds true in regards to insurance policies, property rights or the sale of a large estate. A handful of other scenarios that could be included are:
- Settling a dispute between to independent parties.
- Protecting your personal assets.
- Determining how an inheritance should be split up.
- If debilitating medical problems are expected in the near future.
We should make it clear that you will still have to be of sound mind and body when setting up a POA in order for it to be legally binding. In the same respect, simply establishing this legal representation does not necessary mean that it has to be used immediately. For instance, it could remain inactive until a certain set of circumstances arise (such as a stroke or a death).
How to Choose the Attorney
Trust is an important issue, so it is common for individuals to choose a spouse, close friend or family member. While companies such as a bank can be selected, we should note that this normally comes with extra costs.
Understanding how a power of attorney works is crucial if you hope to make an informed decision. This is why the team at Anglia Probate & Trusts is here to help. If you would like advice about Powers of Attorney or more information about our fixed-fee services, please get in touch with us.