Powers Of Attorney: Dispelling The Myths

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 fully aware that quite unlike us, the average person does not spend hours a week thinking about Powers of Attorney. In fact, for some people, it won’t even cross their mind that it is something they may need until it is too late. A troubling array of misconceptions also mean that whilst people are becoming more aware of what a Power of Attorney is, they often think it is not something that they may need.

A PoA is a legal document giving one or more people authority to make decisions on your behalf.

Below we clear up five common misunderstandings that we encounter day to day.

I have a Spouse/Partner who is down as my next of kin, so it doesn’t matter

There are two misconceptions covered here: firstly, that PoAs only appoint someone to make decisions about your healthcare — often the powers granted are far more extensive — and secondly, that having a next of kin provides authority for them to make decisions about your welfare.

Whilst your next of kin can speak with your medical practitioners when you lack capacity and cannot voice what you would like to happen in relation to your treatment, they cannot give instructions to your doctors or make binding decisions regarding any treatment where they are not also your Attorney

I have a Will so I don’t need a PoA

People often get confused by the distinction between Executors and Attorneys but the two roles can be simply categorised. Executors act in dealing with winding up your estate after you die. An Attorney can only act whilst you are alive and depending on the Powers granted can assist with making decisions about pretty much every financial or welfare / healthcare matter (with some limitations) that may arise.

A PoA is arguably far more important a legal document for you as an individual than a Will, as if used it will direct who can make decisions about your life, whereas a Will simply dictates what is to happen to your assets after you die. 

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. A loss of capacity can also be temporary, for example, during a mental health episode, or when unconscious, which often can’t be foreseen.

But the financial element of a 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 sign the required papers.

A PoA is an unnecessary expense

The cost of not having a PoA can be very much higher both financially and on your family’s wellbeing 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, invasive, and expensive for your loved ones.

A PoA won’t help my business

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, unavailable, or unable to access crucial data or bank accounts. The powers relating to businesses have been carefully curated by our team to try and ensure your attorney can step into your shoes in management decisions if you are unable to act.

Know the basics

A Power of Attorney, or PoA is a legal document giving one or more people authority to make decisions on your behalf. These decisions could relate to:

• health and welfare matters
• property and finances
• both of these