Happy New Year! I do hope you had an enjoyable Christmas and New Year break with family and friends.
Over Christmas, one of my clients asked me a couple of questions about Powers of Attorney, and I thought the New Year might be a good time to give a very brief reminder of how these work.
A power of attorney (POA) is a legal document that allows you to appoint someone to make decisions on your behalf:
Ordinary power of attorney (OPA).
A temporary document that allows someone to make decisions about your finances when you are unable to. For example, if you are in hospital or on holiday.
Lasting power of attorney (LPA). Previously Enduring Power of Attorney.
A permanent document that allows someone to make decisions about your finances, health, and welfare, even if you are unable to make them yourself. You can choose to give your attorneys the power to make decisions as soon as the LPA is registered or only when you lose the ability to make decisions.
Without a Power of Attorney in place, when someone loses capacity, it can prove very difficult for friends and relatives to make decisions on their behalf because of the many understandable safeguards in place.
I strongly recommend that all clients have Powers of Attorney set up. If you haven’t gotten around to this yet, maybe you could make it one of your New Year’s resolutions. I will be happy to recommend a good firm of solicitors who can do this for you, if required.
One paragraph it is important to have included in a Power of Attorney is as follows:
“My attorneys may transfer my investments into a discretionary management scheme. Or, if I already had investments in a discretionary management scheme before I lost the capacity to make financial decisions, I want the scheme to continue. I understand in both cases that managers of the scheme will make investment decisions, and my investments will be held in their names or the names of their nominees. I authorise any person holding any will or codicil of mine to disclose its contents to any attorney acting under this lasting power of attorney, but only if that person reasonably believes that: (A) I do not have capacity to authorise disclosure myself; and (B) disclosure is in my best interests.”
If this paragraph is not included, it may not be possible for some investment platforms and/or discretionary investment managers to continue to act on your behalf according to your attorney’s instructions.
If you already have an Enduring or Lasting Power of Attorney in place, this should be a relatively simple addition.
I hope you have found the above helpful but if you have any questions, please do not hesitate to contact me.
Yours sincerely,
Graham Ponting CFP Chartered MCSI
Managing Partner
