Antony Caulfield, Private Client Partner, discusses the importance of reviewing and updating powers of attorney.
Whilst clients will often ensure they regularly review and update their Will, I am always surprised that clients will overlook reviewing and updating their powers of attorney.
A Lasting Power of Attorney is a legal document under which you give another person or persons (known as an attorney) authority to make certain decisions on your behalf even if, (or especially if), you do not have the mental capacity to make those decisions yourself. You can prepare a Lasting Power of Attorney giving your attorney authority to make financial decisions on your behalf and a Lasting Power of Attorney giving your attorney authority to make health and welfare decisions for you, in circumstances where you cannot communicate your wishes yourself.
Lasting Powers of Attorney are very important and powerful documents and as such it is imperative that you have in place attorneys, in whom you have complete trust and confidence and who also possess the requisite skills and knowledge to be able to deal with your affairs efficiently and to make important decisions on your behalf. As time goes on, the attorney’s health, or personal circumstances, may change, which may mean that although they were suitable to act as an attorney, at the time you originally prepared the document, at the time you need help, they may no longer be capable of acting, due to their health. Also, if your relationship with the attorney changes, you may no longer feel comfortable with them acting for you and having very wide powers to deal with your financial affairs, or make important health and welfare decisions, for you. It is also very important that, at the time you prepare the document, you discuss fully with your attorneys the extent of the role and what they are taking on, to ensure they are prepared and willing to deal with your affairs for you, when you need help.
I recall a case, a while back, where a client had prepared an Enduring Power of Attorney but had never got round to reviewing and updating the document, which appointed her cousins. At the time she needed help both her cousins were in poor health themselves and therefore were not in a position to act for her. As the client had lost mental capacity, this resulted in an expensive application to the Court of Protection, for the Court to appoint a Deputy, to act for her. The expense and delay of this application could have been avoided, if she had been pro-active, in reviewing and updating, her power of attorney.
I have also come across another case recently, where the client made a power of attorney, a few years previously appointing as attorneys her daughter, along with her daughter’s ex-husband and a former friend, who the person had since fallen out with. Although her circumstances had changed some time back, the client had not got around to updating her Lasting Powers of Attorney, despite the fact that 2 of the attorneys were now wholly unsuitable to act for her.
The other important issue, which sometimes arises, as a result of not reviewing powers of attorney, is that the law may often change, meaning that even if the old style power of attorney you prepared is still legally valid, banks and other financial institutions become increasingly unfamiliar with the old style documents and then when they come to be used, this can lead to delays and unnecessary additional correspondence with the organisations, at a difficult time, due to their unfamiliarity with the documents.
I would therefore strongly recommend that all clients actively review not only their Wills, but also their powers of attorney, on a regular basis, to avoid unexpected problems, delays and disputes arising, further down the line, when you require help.
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