Powers of Attorney – the mental health insurance policy?

As unpredictable as the future is, it’s safe to say that mental ill health will touch each of our lives in some way.

A particularly worrying trend is the rise in cases of dementia. It is reckoned that, globally, the number of people living with dementia will rise from 50 million in 2018 to 152 million in 2050. People over the age of 65 now have a one in 14 chance of developing it. For those over 80, it’s one in six. Source: Alzheimer’s Research UK.

The idea of a person becoming mentally unwell to the extent that they can no longer make decisions in their own best interests causes huge emotional issues for those close to them. It also brings significant practical and legal considerations to the fore. The most prominent of these is usually: who takes care of this person’s affairs now that he or she can’t do it?

The answer depends on whether or not the person put in place a Power of Attorney – a legal document specifying who should take important decisions on their behalf in the event that they lose mental capacity. Without this, there would need to be an application to a specialist court – the Court of Protection – which would take over handling the affairs. The problem with that in some family members’ eyes is that it can distance them from the important decisions.

Yet too few people consider Powers of Attorney. When life is good and there is no reason to believe that mental illness is on the cards, it is easy to sideline things that don’t seem relevant or necessary at the time. But that is the point. A Power of Attorney can only be made while a person is considered mentally capable. Once capacity is lost, it’s too late.

What is a Power of Attorney?

There are two types, and they each put in place mechanisms for having important decisions made in the event of incapacity. Remember that the legal right to deal with another person’s affairs does not arise automatically. Access to bank accounts, for example, will not be granted without legal authority even if the account-holder has become mentally incapacitated. Where a Power of Attorney has been made, the ‘attorney’ takes over the decision-making and the more general handling of affairs.

Ordinary Power of Attorney

This is a temporary measure aimed at covering a period during which a person feels they will not be able to make decisions about their finances. Perhaps they are incapacitated (in hospital, for example) or living or holidaying abroad. An Ordinary Power of Attorney allows them to appoint someone to make those decisions for them.

Lasting Power of Attorney

A Lasting Power of Attorney is made with the possibility of future mental incapacity in mind. In many situations, it never sees the light of day because the person who made it did not go on suffer from mental illness. However, its value is twofold: (a) it provides the comfort of knowing that it’s there should it be needed, and (b) it will be an invaluable way of enabling decisions about some of life’s most important issues to be dealt with.

An attorney can be given responsibility for decisions about the person’s property and finances (whether to sell their house, for example), or their health and welfare (should they receive a particular medical treatment, perhaps?). It is common for more than one attorney to be appointed, so it’s important that they are likely to be able to work together with the shared aim of making the best possible decisions in the circumstances.

It is also important to choose attorneys whose values and judgement you trust. They do not necessarily have to be experts in the task they could be given (you don’t need to have an accountant for the finances, and a doctor for the medical side of things) but it really helps to have people who will work diligently and sensibly in their role. In fact, most people choose a close friend or family member because of the close connection and level of trust that that generates.

Despite their many benefits, Powers of Attorney remain underused. We want this to change. As Wills and Probate solicitors, we see every day the difficulties that can be caused when mental illness or mental incapacity caused by an accident (this isn’t just about dementia) takes hold of people and families. So our advice is always to plan ahead. Put in place the things that could help you and those you love. The relatively straightforward step of making a Power of Attorney could be the best thing you do today.

To discuss making a Power of Attorney, or for advice about any aspect of Wills and Probate, contact us 0808 256 2917 or email [email protected].