Don't let the misconceptions about Powers of Attorney (PoAs) put you off setting one up. As with an insurance policy or life jacket, you could end up thanking your lucky stars you have one
We’re the first to admit that setting up a Power of Attorney is not the
most aspirational of milestones. But excitement is not really the point of
them. Various misconceptions cause them to be sadly neglected and overlooked,
with serious consequences for you and your family.
"A PoA is a legal document giving one or more people authority to make decisions on your behalf."
Below we clear up four common misunderstandings.
A PoA is only for people who have lost capacity
The welfare element of a PoA comes into play if you lose capacity and are no longer able to make decisions for yourself. This could happen at any age – for example, in the event of a serious accident.
But a financial PoA can be used for convenience when you do still have
capacity (under your instruction). For example, if you were selling your home
and got stuck abroad at a crucial point during completion, your attorney could
step in and save the day.
A PoA is an unnecessary expense
The cost of not having a PoA can be very much higher than the cost of
setting one up. If you lost capacity and didn’t have a PoA, the court process
of having a Guardian appointed could be slow and expensive for your loved
ones.
A PoA is only for individuals
Not so. For small businesses and sole traders, a business PoA can ensure
bills and salaries are paid and contracts signed if you are incapacitated or
unable to access crucial data or bank accounts.
A PoA can’t be put in place during lockdown
False again. Lockdown has presented various logistical hurdles including how to have PoAs (and other documents such as Wills) signed and witnessed. However, there are simple solutions available, such as signing by video link.
