Power of Attorney | What happens if you don’t have one? 

Think about not being able to make choices about your finances, health or housing and about how no one can legally intervene. This is a reality for thousands of families annually.

Without a power of attorney, even your loved ones may not be able to make decisions for you. Even the spouse can be barred from accessing joint accounts, unable to pay bills or having to deal with complicated court procedures.

This article details everything you need to know about a power of attorney, how it varies between the UK and Ireland, its importance and the steps you can take to create one.

What is a Power of Attorney?

A Power of Attorney (POA) is a legal document in which you appoint someone you trust (your attorney) to make decisions on your behalf if you become mentally incapacitated.

This authority is given by the person who gives it, known as the donor. An attorney may be responsible for managing your bank accounts, paying your bills, selling your property or making your health care choices.

If there is no power of attorney, professionals (such as doctors or social workers) can make decisions based on what they believe to be in your “best interests”. This may not be in line with your own wishes.

How the Rules Differ Across the UK and Ireland

The rules and regulations vary across different countries. 

England and Wales

There are two kinds of Lasting Power of Attorney (LPA):

Health and Welfare LPA: This includes decisions regarding health care and day-to-day activities. It only takes effect if you lose mental capacity.

Property and Financial Affairs LPA: Relates to money, property and assets. Can be used as soon as it is registered.

Scotland

Scotland has a Continuing Power of Attorney (CPA) for financial issues that may be activated at any time and a Welfare Power of Attorney (WPA) for health and personal decisions that only takes effect once capacity is lost.

Northern Ireland

A regular financial power of attorney will be terminated when the person becomes mentally incapacitated. An Enduring Power of Attorney (EPA) may continue once there is a loss of capacity.

Ireland

An Enduring Power of Attorney (EPA) in Ireland is regulated by the Assisted Decision-Making (Capacity) Act 2015 and monitored by the Decision Support Service (DSS). EPAs registered after 26 April 2023 are required to be registered within 3 months.

What an Attorney Can and Cannot Do

The powers granted are determined by the kind of power of attorney you establish.

Property and Affairs

An attorney may be responsible for your finances, paying bills, collecting benefits, selling property, and making investments.

Personal Welfare Decisions

Attorneys have the right to make decisions about where you are accommodated, how you are cared for, and medical treatment, but in Ireland, an EPA does not cover medical interventions. To obtain that, you must have an advance healthcare directive.

Attorneys have a legal duty to do what is in your best interests and to maintain proper records of their actions.

How to Choose Your Attorney: Key Considerations

The most crucial decision to make is who to choose. Find a reliable, competent, and willing individual to do the job.

The value of integrity outweighs that of financial knowledge. Your attorney will have to make tough choices on your care or finances and will need to be a person who is knowledgeable about your values and will make decisions for you and not for their own benefit.

Ask yourself:

• Do they have the organisational skills needed to deal with paperwork and interact with banks and care providers?
• Will they ask you and your family for advice before making any big decisions?

You may want to have several attorneys appointed. They can be appointed to act jointly (all must agree) or jointly and severally (each can act separately). Make sure to appoint an alternate attorney in case your first attorney is unable to represent you.

A Simple Step-by-Step Guide to Getting Started

• Determine what kind of power of attorney you require: financial, welfare or both.
• Select your attorney(s) and verify that they are available to represent you.
• Fill in the legal documents. This may be done on your own, although it is best to have a solicitor to avoid delays and ensure that it is done correctly.
• Have the document signed by you in front of witnesses and sometimes a notary.
• Register the Power of Attorney with the relevant authority (e.g., the Office of the Public Guardian in the UK or the Decision Support Service in Ireland). Registration may be a lengthy process, requiring several weeks.

The registration fee for an LPA in England and Wales is £82 per LPA. An EPA is not free in Ireland and fees apply for the registration of an EPA with the DSS.

What Happens If You Don’t Have One?

Without a power of attorney, your family will not automatically become your guardian if you become mentally incapacitated. They will have to make an application for deputyship (England and Wales) or guardianship (Scotland), which can be time-consuming and expensive and can take months.

Bank accounts can be frozen, bills may not be paid and important decisions regarding your care may be postponed during this period. The court can choose a person whom you wouldn’t have selected.

Monitoring and Safeguards Against Misuse

There is a real risk of it being used in an inappropriate manner. Warning signs are when they withdraw money without explanation, when they are secretive about their money, or when they pay bills without earning the money.

Safeguards include:

• Selecting a person you completely rely on.
• Establishing boundaries on their authority.
• Having two or more individuals make decisions together on significant issues.

Attorneys are monitored by the Office of the Public Guardian (UK) and investigated by the Decision Support Service (Ireland).

Why Planning Ahead Matters

There is limited evidence suggesting that less than 40% of those over 70 years of age have a power of attorney. However, once you have lost mental capacity, it’s too late to establish one.

A power of attorney is similar to an insurance policy. It might never come in handy, but when it does, it gives you the assurance that someone you know will make choices based on your wishes. It also helps alleviate the stress, cost, and worry for your loved ones during a challenging time.