Have a back-up plan for your declining years

THE power of attorney (POA) register in England and Wales has passed the three million mark as more people guard against no longer being able to look after their own affairs.

That is according to the 2017/18 annual report of the Birminghambased Office of the Public Guardian which oversees such matters.

It sounds a lot … unfortunately many more need to heed the message.

Just a year ago, we highlighted a study by Solicitors for the Elderly in conjunction with think tank Centre for Future Studies which claimed the UK was “sleepwalking” towards a dementia crisis with millions failing to take steps to prepare for losing mental capacity.

It found that 12.8 million people over the age of 65 run the risk of developing dementia, and predicted that by 2025, including undiagnosed cases, there could be 1.3 million with the condition.

The fact is that POAs are often overlooked – many have drawn up a will but few seem to have a POA.

There are perhaps two main reasons for this.

Younger people may take the view there is no urgency. Something that can be ignored until much later. But incapacity can strike at any age.

Secondly, many find it difficult to confront the prospect of our faculties declining in later years, a ghastly vision to be put off as long as possible.

So all too often we leave it until it is too late. Then, suddenly, a full scale family crisis emerges over “what to do about granny”.

Which is why it is important to take the necessary steps to ensure your future by taking out a POA.

In essence a POA is an agreement drawn up by the individual concerned specifying who makes decisions for them in the event they become mentally or physically incapable of looking after themselves. Perhaps they suffer a stroke; maybe they are in a car accident.

It is a means of planning for the worst case scenario, but has to be handled delicately as this is a sensitive situation for all involved.

Creating a POA doesn’t immediately give power away – it must first be triggered at the request of the person concerned or because they are deemed incapable by medical assessment. But it does provide peace of mind knowing if something were to happen, having previously nominated an ‘attorney’ or more than one ‘attorney’ to take charge, the family would be able to provide full support and make all the necessary decisions when or if required.

Not setting up a POA in advance can mean approaching an agency known as the Court of Protection, a procedure which can be a complex, timely and expensive exercise.

There are two types of power of attorney – health and welfare and property and financial affairs.

The former covers things like choices around care plans, medical treatment and end of life wishes.

The latter deals with the management of property, other assets, bank accounts and bill payments.

Your ‘attorney’ could be a relative, a friend, a professional (such as a solicitor) or your husband, wife or partner. When choosing an attorney, think about how well they look after their own affairs, for example their finances, how well you know them, if you trust them to make decisions in your best interests and how happy they will be to make decisions for you.

To make a POA choose your attorney, fill in the forms to appoint them, then register your POA with the Office of the Public Guardian (this can take up to 10 weeks).

It costs £82 to register, double that if you opt for both types of POA. Trevor Law is managing director of Eastcote Wealth Management, chartered financial planners,

based in Solihull. Email: tlaw@eastcotewealth.co.uk

The views expressed in this article should not be construed as financial advice