Power of attorney offers ‘peace of mind’

As the population ages, an increasing number of older people are finding themselves in financial limbo as their mental state deteriorates and they are no longer capable of making financial decisions.

There are more than 500,000 people aged over 65. It is believed about 7% of these are suffering from some form of dementia with the percentage due to rise.

Paul Gilmer, a solicitor with ITC Consulting, said very few people understand the importance in signing over the enduring power of attorney. “Most people are aware of the importance of having a will in place, but tend not to consider what happens in the event of a mentally debilitating illness or disability.

“Normally, in the event of mental incapacitation, the individual’s assets are frozen and no activity is permitted until the person recovers from the illness or disability.

“The only way assets can be unfrozen is by the time-consuming and potentially expensive process of having the person appointed a ward of court and then going back to the court whenever a decision needs to be made,” he said.

Mr Gilmer said a person in good mental health can appoint another person to act on their behalf if their mind begins to fail.

“In planning ahead and making an enduring power of attorney, a person is able to give their instructions while they are of sound mind, in anticipation of the possibility of not being capable at some future date of managing their affairs.

“Obviously, it is difficult for someone to contemplate that they may ever lose their ability to manage their affairs. However, an enduring power of attorney can ensure that, if this does happen, a person’s financial affairs will be looked after by someone they themselves have chosen and trust.”