It is a fact that on average we are living longer and as a consequence it is more likely that many of us may suffer periods of deteriorating health and some of us may suffer declining mental health.
Fortunately, the Law provides ways for a person to make provisions to manage their finances and lifestyle should they lose the ability to do so themselves by means of a Power of Attorney and Enduring Guardianship. These two documents are very important Estate Planning tools.
Power of Attorney:
There are two types of Powers of Attorney the first one is where a person referred to as the “Principal” appoints a person to handle their financial affairs referred to as the “Attorney” while the principal is incommunicado i.e. away on holidays, these Powers of Attorney are usually limited to a certain period of time.
The second Power of Attorney is an Enduring Power of Attorney, this is where a Principal appoints an Attorney to manage their financial affairs and if the document is registered with the Land Registry Services the Attorney can sell the Principals property. The important point is that an Enduring Power of Attorney continues to operate when the principal has lost their ability to manage their financial affairs.
For obvious reasons the person the Principal appoints as their Attorney has to be absolutely trustworthy.
The Principal can specify when the attorney’s appointment commences, what powers the Attorney has and providing the Principal has capacity, the Principal can revoke the attorney’s appointment.
The Law also provides a way for a person to appoint someone to make lifestyle decisions for them when they have lost the ability to make lifestyle decisions for themselves.
The person appointed to make the lifestyle decisions on behalf of the Principal is called the Enduring Guardian and unlike a Power of Attorney an Enduring Guardian can only exercise their appointment when the Principal has lost the ability to make those lifestyle decisions for themselves.
An Enduring Guardian can make decisions such as: where the Principal is to live, what type of personal services, medical and dental treatment the Principal may receive or not receive. Nevertheless, the Principal can tailor make the Enduring Guardian to limit the Enduring Guardian’s powers.
It is important to remember that an appointment of an Enduring Power of Attorney and Enduring Guardian only is valid while the Principal lives and those documents cease to operate on the death of the Principal.
As always, the answers provided are for your general information only and we ask you to call our office on 1800 650 656 to obtain detailed legal advice for your individual situation.
Peter McManus | Wills and Estate Planning Solicitor