Power of attorney for your finances: what you need to know

A power of attorney is a way of planning ahead for your financial security in the future.

There might come a time when you aren’t able to make decisions for yourself, that could be due to old age, illness or an accident. Or maybe you’d just prefer for someone else to handle your affairs.

A power of attorney gives someone you trust the ability to look after your best interests.

If you become unable to make your own decisions without a power of attorney in place, the alternative would be to get a court order. This can take longer to set up, is more complicated and can cost more.

What is a power of attorney?

A power of attorney is a legal document that allows you (the donor) to give one or more people (the attorneys) the power to make decisions on your behalf when you can’t make your own decisions, or you’d prefer not to. 

You decide who is given the power, and you decide whether they’re allowed to make decisions over your:

When to think about setting up a power of attorney

If you plan to set up a power of attorney, you need to do it while you're still able to make your own decisions. It's a good idea to get it set up well before you need it.

Setting one up now doesn't mean you instantly give up control, though.

When you set up a power of attorney in advance, you can still make decisions over your own affairs. Unless you decide not to, or become unable to make your own decisions.

The type of power of attorney you make and the instructions you put in the power determine when the attorney can use those powers. Some types of power of attorney only give the attorney the power when they're registered with a government body.

Your attorney can deal with your financial services companies on your behalf

A person who holds a power of attorney covering financial affairs and property is allowed to deal with financial services companies. These include your bank and your pension and investment provider (such as Prudential).

For example, when dealing with a pension and investment provider, an attorney could:

How long a power of attorney lasts

A power of attorney could last for a short time. Or it can continue after you’re no longer able to make your own decisions.

It depends on the type of power of attorney you choose.

Types of power of attorney in the UK

It's important that you choose the right type of power of attorney for you.

If you want a power of attorney for your financial affairs and property to continue after you’re not able to make your own decisions, you should think about choosing one of these:

• a lasting power of attorney if you live in England or Wales

• a continuing power of attorney if you live in Scotland

• an enduring power of attorney if you live in Northern Ireland.

A 'general' or 'ordinary' power of attorney is often used as a temporary measure. It's only valid while you’re still mentally able to manage your own affairs. For example, you might use it if you become ill for a while.

You can also set up a lasting or continuing power of attorney to cover just health or welfare, or a 'combined' power of attorney to cover health, welfare, finances and property.

There are also different types of power of attorney if you live overseas, depending on the country.

We only accept powers of attorney that cover finances and property

Prudential only accepts powers of attorney that cover finances and property. And if you can’t make decisions for yourself any more, we can only accept 'lasting', 'enduring' or 'continuing' powers of attorney.

Before your attorney can start managing your affairs with us we need to check the power of attorney and the attorney’s details.

What happens if you lose mental capacity and don't have a valid power of attorney

You can only create a valid power of attorney while you're still mentally capable.

If you lose the ability to make your own decisions and don't have a valid power of attorney in place, then the court will decide who will look after your affairs.

It will issue a court order. It has different names across the UK:

The people who would want to act on your behalf would need to apply to the court to be given this power. If you're acting on behalf of someone you can find more information here.

Choosing your attorney

Your attorney should be someone you really trust to do what's best for you. It can be one person or more than one person.

You should consider whether you think the person or people you have in mind are able to always act in your best interests.

How to set up a power of attorney

To set up a power of attorney, you should:

1. Decide what type of power of attorney you want (you should consider whether or not you want or need to consult a solicitor for advice. Your local Citizens Advice can also help)
   
   
2. Choose who you want to be your attorney
   
   
3. Consider having a solicitor draft your power of attorney for you, instead of drafting it yourself, to make sure it’s done properly. Most solicitors should be able to help draft one, as well as provide legal advice. 
   
   
4. If you're setting up a lasting, continuing or enduring power of attorney you need to fill out the right forms (if you're drafting it yourself). 
   • If you live in England or Wales, you'll need to use a form which you can get from the Office of the Public Guardian. Or create a lasting power of attorney online.
      
   • If you live in Scotland, there isn't a standard Continuing power of attorney form, however you can find forms from the Office of the Public Guardian. Alternatively, most solicitors should be able to help in drafting one and providing legal advice.
     
     
   • If you live in Northern Ireland, for an Enduring power of attorney you'll need to use a form which you can get from the Department of Justice.
     
     
   • If you're setting up an ordinary power of attorney (known as general in Scotland), it must be signed as a deed and may need to include certain things. A solicitor should be able to help you with this.
      
5. Depending on the type of power, you might need a doctor (GP) or solicitor to provide confirmation of your ability to make decisions. For example, they may need to sign a statement or certificate of capacity. You don’t need this for a general or ordinary power of attorney
   
   
6. Once signed and properly witnessed decide whether you need to register it, and when to register it. Some types of power of attorney (such as a Lasting power of attorney) only give the attorney the power when they're registered. This can take up to 10 weeks, so it's a good idea to register as soon as possible. These are the bodies you register it with:

• If you live in England or Wales, register it with the Office of the Public Guardian.

• If you live in Scotland, register it with the Office of the Public Guardian in Scotland.

• If you live in Northern Ireland, register it with the Office of Care and Protection.

Talk to a solicitor for advice

You might want to talk to a solicitor for advice on setting up a power of attorney, however this will cost a fee.

You can find one in your area through one of a number of legal bodies:

• Search for a solicitor through the Law Society (for England and Wales).

• Search for a solicitor through the Law Society of Scotland.

• Search for a solicitor through the Law Society of Northern Ireland.

There's plenty more information available

For more information on powers of attorney, visit:

• The gov.uk website (for England and Wales).

• The Office of the Public Guardian in Scotland website.

• The Department of Justice website (for Northern Ireland).

Also, learn about what an attorney needs to do before they can manage your policies or funds with Prudential once a power of attorney is in place.

More information