POWER OF ATTORNEY

Granting a person power of attorney gives them a measure of control over your financial affairs, so you need to choose carefully. Again, this is not something you should do without legal advice.

There are two types of power of attorney:

■ General power of attorney, which gives a person access and control over your financial affairs. It becomes invalid upon your death or if you lose the mental capacity to make your own decisions.

■ Enduring power of attorney, which continues to operate if you are unable to manage your affairs due to mental or physical incapacity. This type of attorney gives great control to the holder, so don’t enter into it lightly.

Most people choose a life partner or trusted family friend to be their power of attorney. This person needs to accompany you when you meet with your solicitor. At the meeting, your solicitor will set out the responsibilities and legal obligations of the person holding the power of attorney. This includes keeping their own money and assets separate from the person they’re representing.

Your enduring power of attorney must act in good faith and in your best interests. Their decisions are open to challenge and applications can be made by concerned parties, such as close relatives, to revoke the power of attorney.

ENDURING GUARDIANSHIP

An enduring power of attorney does not give the holder rights over decisions about your health or medical treatment. For this, you need an enduring guardian.

If you are mentally impaired through, say, Alzheimer’s or a stroke, the guardian can decide on medical treatment or even where you will live.

The medical side of it can get tricky, as doctors have ethical standards they must follow and they can overrule the guardian. If you haven’t appointed a guardian, the states have guardian services that can take over your affairs. This is not an ideal situation and can be avoided if a friend or loved one has been given guardianship.