Planning for the future means different things to different people. To some, it will be as straightforward as what to see at the cinema this week. To others, it might be planning for this year’s family holiday. Some might plan to move house this year and others might be planning to move job. However, what everyone should be thinking about is planning for the unexpected. There can be nothing more unexpected than an illness, accident or other incapacity that renders you unable to look after your own affairs. That’s where a Power of Attorney comes into play. But is there a “right age” to draw up a Power of Attorney?

What is a Power of Attorney?

Perhaps, before looking at when is the right age to draw up a Power of Attorney, we should set out what a Power of Attorney is.

A Power of Attorney is a document that authorises someone to make decisions and take actions for you. There are also Powers of Attorney that continue that authority when you no longer have the capacity to make decisions or take action yourself.

There are three types of Power of Attorney:

A General Power of Attorney

A general Power of Attorney authorises someone you appoint to act as your attorney in a range of specific matters. This type of Power of Attorney is usually used as a matter of convenience. For example, someone may grant this type of Power of Attorney if they live or work abroad but need someone else in Scotland to make decisions for them and take action in respect of their affairs in Scotland.

Whilst this type of Power of Attorney is convenient, if the granter becomes incapacitated and loses their faculties, the powers contained in this type of Power of Attorney cease.

In recognition of this factor, the Adults with Incapacity (Scotland) Act 2000 (the 2000 Act) introduced two new types of Power of Attorney.

A Continuing Power of Attorney

This type of Power of Attorney authorises and empowers the attorney to deal with all aspects of the granter’s financial and property affairs.

A Welfare Power of Attorney

This type of Power of Attorney authorises and empowers the attorney to deal with all aspects of the granter’s welfare.

Frequently, both these types of Power of Attorney are integrated into a Combined Continuing and Welfare Power of Attorney.

The important aspect of Powers of Attorney created in terms of the 2000 Act is that they can survive the granter’s incapacity. That means the attorney can continue to make decisions and take action even if the granter has lost their faculties.

'Old Age' is a common misconception

There is a common misconception that only elderly people need a Power of Attorney. A certain percentage of the population in Scotland will, regrettably, suffer from some form of dementia. When that happens, especially if they need residential or nursing care, someone may have to make decisions for them. This is where a Combined Continuing and Welfare Power of Attorney can come into its own.

This type of Power of Attorney authorises the attorney to deal with all aspects of the granter’s care package whilst managing the granter’s property and finance in the granter’s best interests.

If a Power of Attorney is not in place, a guardianship order may be needed to enable someone to make decisions affecting the incapacitated adult. Obtaining a guardianship order from the court is time-consuming and can be very expensive.

However, whilst most people think that only the elderly need a Power of Attorney, that is a false assumption.

You cannot normally choose when something 'bad' might happen to you

What if you had an accident or contracted an illness that meant you lost your faculties? Even if this was for a relatively short period of time, it is likely that there would be situations where decisions have to be made. You might suffer financially if you were unable to make decisions yourself.

Let’s say you own a business. You deal with the day-to-day operations and employ people in the business. You are the sole signatory on the bank account. Now, if you were to have a debilitating accident, who would make those decisions for you? Importantly, for your employees, how would they get paid?

Alternatively, what would happen if you became seriously ill and very quickly could no longer look after your own affairs? Some illnesses tragically arrive without warning and are extremely aggressive causing a loss of capacity very rapidly. Your loved ones are unlikely to be able to make financial or welfare decisions for you without your proper authority.

These are only two scenarios out of countless others. The important thing to think about is that something like this could happen at any time in the future and at any age, without any warning whatsoever.

Think about a Power of Attorney as an insurance policy

We all usually have some form of insurance to protect us when something “bad” happens. We have buildings and contents insurance should your house be damaged or contents stolen or car insurance to cover you if you have an accident or even life insurance to pay out when you die. However, what about insurance that kicks in if you lose your faculties?

A Power of Attorney will appoint someone you trust to make decisions and take action for you if you are unable to make them yourself.

So, what is the 'right age' to draw up a Power of Attorney?

As you read this article, ask yourself “what age am I now”? Your answer is the “right age” to draw up a Power of Attorney!

Specialist Estate Planning Lawyers, Edinburgh

Murray Beith Murray Partner, Andrew Paterson, specialises in trusts, estate planning and asset protection with expertise in issues surrounding creation of a Power of Attorney. If this blog has raised any questions or you have a matter to discuss please get in touch using the enquiry form or call on 0131 225 1200.

Murray Beith Murray was established in 1849, as advisors for generations of clients, committed to our values of integrity, expertise and trust. This aim and these values continue to this day as does our commitment to be here when you need us.