Should I be my uncle's financial Power of Attorney?
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My uncle has asked me to be his financial Power of Attorney. He has early signs of dementia, so I know there will come a time when it would be needed. I’d like to say yes, but I’m really nervous about handling his finances as he has quite a large investment portfolio. He seems to take a fair bit of risk with his investments but that isn’t really my nature. Should I take it on?
Matthew Hinchliffe of Smith & Pinching responds:
A Finance & Property Lasting Power of Attorney gives you the responsibility of dealing with everything relating to the person’s financial circumstances including paying bills, looking after property, and handling their savings and investments. It needs to be registered before it can be invoked, so the best plan is to register it immediately so that it’s ready for use when needed.
When you act on someone’s behalf under a Power of Attorney, you should take decisions based on their best interests. You should follow their wishes as far as you are able, which might suggest that you should be taking the same level of risk that they would normally take themselves.
The important thing to remember is that once invoked you are accountable to the Office of the Public Guardian and the Court of Protection for all the decisions you make on your uncle’s behalf. What they will be looking for is that you have acted in his best interests and that you can justify your actions. This may sound daunting but provided you keep clear records, ensure your own finances are completely separate to his, and have good reasoning for your decisions, it should be straightforward. A guide to being an Attorney can be found on the Office of the Public Guardian Website.
I suggest you talk all of this through with your uncle so that you have a clear understanding of how he wants his finances managed when you take over. Ideally, you would get his thoughts in writing so that when the time comes, you can be confident that you are acting according to his wishes. It might be a good idea for him to discuss his finances with you on a regular basis from now on and include you in meetings with his financial adviser, if he has one, so that you come to understand a little more about investing by the time you take over.
Any opinions expressed in this article do not constitute advice. The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.
For more information, please visit www.smith-pinching.co.uk