A power of attorney is a legal document where you can give someone you trust (known as an ‘attorney’) the right to make decisions and manage your affairs on your behalf.
 

They can look after your money in circumstances where you're not able to yourself. For example, if you develop a serious illness or medical condition. We often see attorneys helping where someone no longer has ‘mental capacity’, which means they have difficulty with understanding or making important decisions.
 

You can appoint more than one attorney, but they must be at least 18 years of age.

Setting up a power of attorney is different for different areas of the UK (and they may be called different things too!). You can find out more in the sections below.
 

Typically, each part of the UK requires a power of attorney to be completed using either standard forms or by a solicitor. The form or document will set out the types of decisions the power covers and when and how it can be used. It’ll be signed by the person granting the power (often called the ‘donor’), their chosen attorney(s) and often independent witnesses usually sign the forms too. These are then sent to the appropriate government body for registration, and once registered, is ready for future use.

A power of attorney can be a good thing to have as a ‘just in case’, as it can help safeguard your future, whatever that may bring. However, you might be surprised to note, only 1% of the UK have one in place¹. This could be because of some common misunderstandings about powers of attorney.
 

People often think:  

• They’re for older people. As we all know, sadly, serious accidents or health issues can happen to any of us at any time. Having a power of attorney ready means your loved ones can generally avoid going through a more time-consuming and costly process, which could involve a court hearing to appoint someone to act on your behalf. Instead, with a power of attorney in place, they can begin to make important decisions for you at what could be a very difficult time.
• You can set up your power of attorney at any time. One important thing to remember is that you can only set up a power of attorney when you have mental capacity. Once you've lost capacity, other processes may be used for people to act on your behalf. Again, this could be time-consuming and costly, often involving the courts to make an order and appoint a named person or persons. For example, in England and Wales, this is done by a Court of Protection order.
• Once in place, your attorney can take control of your finances. People often worry that their attorney will be able to spend their money however they like, without any limits. When you set up a power of attorney the signed document clearly sets out when and how your attorney(s) can start to act on your behalf once its registered. The document can give specific instructions to the attorneys about what they can do on your behalf, including how and for what purposes your money may be spent.
• A joint account would accomplish the same thing. Making an account ‘joint’ means each party is jointly entitled to all of the funds in the account, and for their own benefit. This means a joint account doesn’t have the same oversight or controls that apply where an account is held solely in one person’s name and a power of attorney is registered for them. A power of attorney must only be used for the account holder’s benefit and in their best interests.

• S – setting up a power of attorney can mean a much easier process for you and your relatives if you were to need support in the future
• A – attorneys have to act in accordance with your wishes and with your best interests in mind
• F – find out more about powers of attorney specific to your country of residence
• E – even if it’s never needed, it’s great for your peace of mind.