Having a Power of Attorney in place allows you to nominate one or more individuals to act on your behalf if you become unable to make decisions for yourself in the future. It is often wrongly assumed that your spouse or another relative could automatically access your funds or investments if something happened and you could no long deal with them yourself.
However, that is not the case. Where assets are held in your sole name, banks, building societies, investment managers and other financial organisations will not permit even a close relative to deal with anything unless there is a valid Power of Attorney in place explicitly detailing who has this authority. This can cause a significant amount of distress and administrative problems if funds cannot be accessed to meet mortgage payments and other household expenses or to pay school fees.
Therefore, Powers of Attorney are vital where a person is still alive but no longer has the mental capacity to make decisions about his or her own affairs. It is important to remember that a Power of Attorney is an entirely separate document to your Will. A Power of Attorney deals with your affairs when you are still alive and lapses on your death. At that point in time, your Will will become operative to deal with your assets and their ultimate distribution to your chosen beneficiaries.