We know about the importance of having a Will if you die, but what about if you lose mental capacity? – say, if you have a stroke or an accident.
When a relative loses mental capacity, it can be an awkward business organising their finances.
It’s an issue which The Martin Lewis Money Show (ITV, 23 January 2015) has tackled.
His emphasis was on England and Wales but the lessons to be learned are equally applicable in Scotland.
“It is so important to get that power of attorney. Everyone should have it.”
These were the words of Julia, from Barnsley, who came to see Martin Lewis at one of his Roadshows.
Her mother has Alzheimer’s.
Fortunately, Julia’s mum, Winnie, had agreed to sign over power of attorney while she was still mentally capable of doing so.
Winnie was now attending a dementia support group, accompanied by her daughter. Julia confirmed that her mum was keeping reasonably well but deteriorating and now requiring twenty-four hour care.
Julia described how her mum had been a fantastic seamstress, who had made Julia’s wedding dress. Now Winnie was reduced to a state where she could not even make a cup of tea for herself because it was too complicated for her to manage the teabag, boiling water, cup, milk and sugar all at once.
It was clearly a huge relief to Julia to know that, with all the worries associated with dementia itself, there were not money concerns as well.
The benefits of a power of attorney
Without proper documentation in place to allow Julia to operate things like Winnie’s bank account, Winnie’s money could have been “locked away”.
If there had been no power of attorney in place, Julia could not have taken on the management of her mum’s financial affairs automatically.
Julia’s ability to take over management of things like bankcards also meant she was reassured that her mum would not be using the bankcard inappropriately and potentially wasting money.
Julia explained that, at age 53, she has now given power of attorney to her two children, who are both in their twenties.
Martin Lewis said that he was a huge supporter of getting a power of attorney and he described it as “very important”. He is 42 years old and he has a power of attorney in place.
What may be required if you don’t have a power of attorney
A “lasting” power of attorney (in Scotland, a “continuing” power of attorney) means you are electing someone to look after your financial affairs for you if you are no longer able to manage them yourself.
It is a point which Martin Lewis has been pushing at Roadshows all over the UK. This even includes speaking about it at Wedding Shows – described as “a bit of a downer for the happy couple”. However, not all newly-weds are in their twenties and planning ahead is important.
If a person becomes mentally incapacitated and there is no lasting or continuing power of attorney in place, it is a hassle to sort out.
It requires a court application to be made.
In England, this is done through the Court of Protection; in Scotland it is done through the local Sheriff Court.
In Scotland, it is what is known as a Guardianship Application, made under the Adults with Incapacity legislation.
In The Martin Lewis Money Show report, there was an interview with a lady whose parents were both 93 years old and whose father had just been diagnosed with dementia.
Referring to the Court of Protection in England, she described the process as lengthy, expensive and stressful.
Common misconceptions about powers of attorney
A lasting / continuing power of attorney gives permission to someone else to take over the management of your financial affairs, if and when you lose your faculties.
Martin Lewis explained the common misconception of people who think that signing a lasting / continuing power of attorney means that you are immediately giving over control of your finances to someone else.
That is not necessarily the case. Instead, it can be set up to take effect only when and if you lose your faculties.
Martin Lewis explained that he has told a number of trusted friends about the existence of his power of attorney and they would make sure, in the event there is a question about his legal capacity, that everything is done fairly and properly. They would not allow an “attorney” to take on their responsibilities unless it was reasonably required.
Continuing and welfare powers of attorney in Scotland
Powers of attorney can cover financial matters, as we have seen above.
They can also cover welfare matters.
A continuing power of attorney relates to property or financial affairs; a welfare power of attorney covers decisions which have to be made in relation to someone’s personal and health care – and can only come into effect on the onset of incapacity in relation to the powers granted.
How we can help
The Martin Lewis programme illustrated well why every adult should have a power of attorney.
If you have any questions about this article or about getting a continuing power of attorney in place, feel free to contact us.
All initial enquiries are free of charge and without obligation.