Sara Smith: A Power of Attorney is not just for ‘old’ people

Many people reading this in today’s Scotsman will know what a Power of Attorney is and probably already know why making one is a good thing to tick off your “to do” list.

Sara Smith is a Partner, Private Client, Urquharts

However, there are many misconceptions about Powers of Attorney and one of the most common is that they are only for the older generation.

Nothing could be further from the truth. Regardless of age, capacity to make decisions can be lost as a consequence of an existing medical condition or unexpectedly through accident or sudden illness.

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If you run a business, ask yourself who would run the business if you were injured, or what would happen if you needed urgent hospital treatment. The impact of a non-fatal but serious injury or illness can put a business which is reliant on an individual into a precarious situation. Someone needs to have the authority to handle the running of the business while the incapacitated person is out of action. Whilst a Power of Attorney will not instantly solve all the practical problems overnight, it does allow that “key” man or woman to prepare for a worst-case scenario without incurring a significant cost.

There are two types of Power of Attorney which are often combined into the one document although separate attorneys can be appointed for the differing roles if that is preferred.

Continuing Attorney

This is the person (or persons) that you would appoint to deal with the business and financial side of your life. Clearly, that person, or persons, must have your absolute trust and confidence along with a working knowledge of your business and finances. He, she or they would be the person or people who would deal with your bank and look after the day to day running of the business.

Sometimes the choice of who to appoint is easy, sometimes not so obvious. However, a Power of Attorney gives you the chance to make your own choice rather than leaving it to the Courts to be asked to approve the appointment of a guardian if you lose the ability to make decisions for yourself. This can take a considerable amount of time, when speed may be required to ensure that all business and domestic liabilities are met within appropriate deadlines. Not only that, but the cost of having a guardian legally appointed can run to several thousands of pounds.

Welfare Attorney

This is a different type of document from the Continuing Attorney for two reasons. Firstly, as the name suggests, it relates only to personal welfare (such as diet, accommodation, choice of dress etc). In the case of a serious injury or illness that can be hugely important in terms of authorising medical procedures, having the authority to discuss matters with medical practitioners, alleviation of pain and other related issues.

Secondly a welfare appointment only becomes effective when the person who granted the power has become incapable of making or communicating decisions about their own welfare.

For these reasons the Welfare Attorney can be someone completely different from the Continuing Attorney.

Many people are hesitant about granting a Power of Attorney because they mistakenly believe that this will involve immediately handing over control of all of their affairs to their Attorney. This is not the case and, while you are able to manage your own affairs, your Attorney should actively encourage you to do so and offer appropriate levels of guidance and support which may (of course) change over time. Putting in place a Power of Attorney simply means that the right people could step in and assist should the need arise.

Plan ahead, not just in terms of making a Will, but give some serious thought to what may happen if you were incapacitated for any reason. Having a Power of Attorney in place means that you can be sure that if something does happen then you have a contingency plan in place for the benefit of you, your family and your business.

In fact, everyone over the age of 16 who understands the effect of a Power of Attorney should be encouraged to put one in place - even if it never actually needs to be used.

Sara Smith is a Partner, Private Client, Urquharts