With an ageing population and the apparently corresponding increased risk of dementia and other debilitating mental diseases, what steps can you take to protect you and your family if you are deemed mentally incapable of managing your affairs.
Well, from 10th April 1989 (the date on which the Enduring Power of Attorney (Northern Ireland) Order 1987 came into force) you are able to create a valid Enduring Power of Attorney.
So what is it? Well a Power of Attorney is a legal document giving someone else the authority to take actions or make decisions on your behalf. It enables you to choose a person/ or people (called an attorney) to deal with your property and affairs.
Sounds straight forward enough and the act of granting a Power of Attorney can take as little as 30 minutes. However, this relatively simple process greatly belies the important nature and effect of this powerful document. Unfortunately, Powers of Attorney can be abused both pre and post registration and the magnitude of granting a Power of Attorney is something that needs to be understood and considered carefully.
An Enduring Power of Attorney can be granted to a person or persons who then can take decisions on your behalf from the date of the grant, unless you include restrictions. Without restrictions or limitations the newly appointed Attorney can act on your behalf and institutions such as banks or social services should permit the Attorney to make decisions and give instructions on your behalf. Say you were physically unable to get to the bank, well, your Attorney could go on your behalf. Now this shouldn't really present a problem because you are also able to continue making decisions and you will be mentally fit and can instruct your Attorney to take actions on your behalf whilst monitoring and policing their conduct. You can of course continue to make your own decisions and choices. Of course, there is also scope for fraud or an Attorney acting without your approval and to your disadvantage at this stage.
Further potential problems may arise if you are deemed mentally incapable of managing your affairs. By definition you will no longer be capable of giving competent instruction nor be able to properly police your attorney's actions. One fail safe is that the Attorney is under a duty to register the Power with the Office of Care & Protection and notice must be given to you and your family of the Attorney's intention to register.
Once registered, the Power cannot be revoked without a Court order and if validly registered your Attorney or Attorneys have effective sole or joint control of your affairs. You can no longer make valid decisions and control has been fully ceded to the Attorney. Of course, this again is where the calibre of the appointed Attorney is crucial. Having chosen carefully, you will be hoping that the Attorney will be fulfilling their legal duty to act in your best interests with both honour and integrity. Regrettably, Powers of Attorney can be abused and Attorneys can be tempted to use their decision making powers to their own advantage.
So the scope for abuse is pretty clear, therefore, what are the advantages? Well, granting A Power of Attorney allows you to choose whom you want to act on your behalf. More often than not this is a close family member with your interests at heart. You can be confident that they will put you first and know what you would want to do in a particular situation.
Without a properly appointed Attorney, if you are deemed mentally incapable, The Office of Care & Protection steps in and a Controller is appointed on your behalf. The Office of Care & Protection closely monitors the actions of the Controller and there are onerous and costly accounting and reporting requirements. In effect, the decisions are taken on your behalf by the Courts and you must pay the Court Fees and annual accounting fees for the privilege. With a properly appointed Attorney all these restrictions Court costs and requirements can be avoided.
Hopefully, this article has given you some insight into Powers of Attorney, and highlighted the importance of carefully considering the decision to grant such a Power. If you want to find out more or have any questions about Powers of Attorney we at Murphy O'Rawe are happy to help and advise.
For further information contact Tim Irwin. Telephone: + (44) 028 90326636