Seventeen per cent of UK adults over the age of 40 have appointed a power of attorney (POA) in place, new research by Canada Life has highlighted.
The firm suggested the figure is both “worrying” and “problematic”.
A POA is a legal process whereby an individual appoints another person to formally act and make decisions on their behalf should they become incapacitated, or unable to do so.
The most common arrangement, a lasting power of attorney (LPA), is when an individual may make decisions on behalf of another for financial decisions, health and care or both. One in 10 (10%) respondents from the Canada Life research chose this type of POA.
For those who had not appointed a POA, common reasons for not doing so were from people suggesting they had “full mental capacity” (32%) and because they’d “never thought about it” (30%).
Technical specialist – tax, trusts and estate planning at Canada Life, John Chew, said: “It is worrying that very few people have appointed a POA, and it is furthermore problematic that many believe that having full mental capacity is a good excuse to put this off.
“In reality, if you get to a stage where you are incapacitated then it will be too late, and the Court of Protection will appoint someone on your behalf. This is why it is essential to start the process when you are in good health and can make your own decisions.”
Canada Life found that for over-40s who had appointed a POA, the most common reason cited was because these individuals “did it at the same time as making a will” (39%).
“Living longer can be a great advantage – but it also brings important responsibilities,” Chew added.
“Estate planning should be a key part of preparing for later life, including appointing a POA, writing a will, and having honest conversations with loved ones about end-of-life wishes and the management of assets. Taking these steps early can ease future burdens and ensure your intentions are clearly understood.”
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