We can all agree that life is chock full of uncertainty. You may never know when life throws a curveball at you. Unforeseen accidents, disabilities and chronic health conditions at times can render us unable to make decisions with clarity and soundness of mind. Such dire situations can leave you and your loved ones feeling helpless and powerless.
To avoid the uncertainty of such times and prevent unwanted duress to your near and dear ones, you can proactively rely on a legal recourse like a Power of Attorney.
A crucial aspect of any estate plan, the Power of Attorney (POA) is a powerful document that covers decisions for health and financial matters in times of great need.
The legal nitty-gritty surrounding Power of Attorney, its types, what it means to be named as an attorney, the dos and dont’s associated with it – is what you need to know about.
Let’s briefly examine all these aspects and what they mean.
Things You Can’t Do With A Power of Attorney
Decoding The Power of Attorney (POA) Document
POA is a document that enables you to appoint a person to make important decisions on your behalf when you are medically incapable or unfit to make them yourself. These decisions can be financial, medical, property-related, welfare, or other important life decisions.
If it is a POA that you need, avoid knocking on a legal professional’s door to draft a POA document, instead appoint a POA online in just a few quick steps.
A POA greatly helps individuals suffering from conditions like dementia and Alzheimer’s. The effects of these conditions can be severe and sometimes have an irreversible impact on their mental capacity to make key decisions.
It aids individuals who have met with life-threatening injuries and whose family members cannot access finances, or make key decisions.
Types of POA in the UK
POA in the UK is of two types – Lasting Power of Attorney (LPA) and General Power of Attorney. An LPA is a court-authorised document that can be vital in many cases.
The validity of both POAs differs – the LPA lasts for a lifetime, while the General POA lasts only for a finite period.
An LPA is further classified into two types, Health and Welfare LPA and Property and Finance LPA, both having specific purposes.
Appointing a Power of Attorney
The role of a POA is vital and cannot be taken lightly so best to appoint someone whom you openly trust for the role of attorney. This person needs to willingly accept the responsibility ethically and morally. It can be a close family member, a dear friend or any of your relatives who are ready to put your needs above their own.
The person who appoints the POA is known as the donor, while the appointee is called the attorney. You can appoint more than one attorney.
Appointed as a Power of Attorney – What Does It Mean?
If you have been named as a POA, that’s wonderful. It means you are an important person who can be trusted and is empowered to decide what falls in the donor’s best interests.
If you are stepping into this role for the very first time, there are certain responsibilities you need to know and understand.
The POA is an important legal document so, it’s good to know what you as a POA are not allowed to do.
5 Limitations of an Attorney in a Power of Attorney
When entrusted as an attorney of an LPA, bear in mind the limitations of these legal documents.
- You Cannot Transfer Responsibility to Another Agent
As an appointed attorney, you cannot forgo your duties and responsibilities and transfer the appointment to another agent at any point in time.
- After the Donor’s Death, You Cannot Make Legal or Financial Decisions
After the death of the donor, as an attorney, you cannot make any financial or legal decisions on behalf of the donor. This is because the validity of the LPA is restricted to the donor’s lifetime. In such cases, the executor of the estate takes over if the donor has created a will.
- You Cannot Change or Invalidate the Donor’s Will or Any Estate Planning Document
As an appointed attorney you do not have the power to change or modify any terms mentioned in the will or estate plans of the donor. You need to adhere to the estate planning documents set by the donor and follow the terms and conditions to the T. Arranging something like a will writing kit in advance of your power of attorney appointment is recommended, because they won’t be able to make any changes to your will after this time.
- You Cannot Use the Donor’s Assets or Finances as Your Own
As an appointed attorney, you are not permitted to borrow money or take a loan from the donor. Neither can you gift large sums of money to people nor hire a fund manager to manage any discretionary funds. This is because the donor’s interests are not justified in all of these cases.
- You Cannot Override Certain Legal Restrictions
The LPA may have granted you authority to make decisions on the donor’s behalf, however, you cannot override certain legal restrictions. This includes making decisions before the POA comes into effect and acting outside the interest of the donor.
In Conclusion
In all legal matters, it is always better to second-guess before taking the next step. Be it estate planning or drafting a will, it is best to rely on a legal expert to navigate the twists and turns that you may encounter in life. The same principle holds true when being named as an attorney.
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