If you are planning to travel abroad this year, why not put a PoA in place as insurance against future unknowns – Simon Smith, Senior Solicitor in our Private Client team explains why you should consider doing so.
At this time of year with the summer holiday season fast approaching, many of us would not hesitate to put in place travel insurance, or ensure the correct sunscreen is packed, before jetting off on holiday – but have you ever considered why you should put a Power of Attorney (PoA) in place before travelling?
Many people associate the need to have a PoA with later life, something perhaps for elderly relatives who may be in declining health, suffering from dementia, or otherwise unable to manage their own affairs.
A PoA can greatly simplify your family’s course of action if you cannot manage your own affairs. If you do not have a PoA in place, and become mentally incapable of managing your own affairs, your family must go through the process of appointing a guardian through the court. This can be a lengthy and expensive process.
A broad range of Powers
Consider the fictional but very real-life scenario of Gwyneth and Paul. Their son Toby has recently accepted a place at university and will soon be fleeing the nest. The couple have decided it’s time to downsize, sell their family home and put away some money for retirement. After a long conveyancing chain for their sale and purchase, they are now in legally binding contracts with the final link of signing the deed for their sale to take place. Before the stress of the upcoming move they have decided to jet off for some foreign sunshine.
Days before their property sale and purchase are due to settle, Gwyneth and Paul’s return flight is cancelled due to an electrical blackout in the airport caused by extreme weather, and they are unable to source an alternative flight home until the end of following week. The purchaser of their house, and seller of their new flat (being part of the conveyancing chain) are unwilling and unable to wait for the couple to return. Gwyneth and Paul could be held in breach of contract if their transactions do not settle as planned and the other parties could seek financial penalties from them. Both their sale and purchase and any associated lending, could potentially fall through.
However, if the couple had planned ahead they could have put in place a PoA in favour of their son Toby, who would have been able, in their absence, to sign the disposition for their property sale. Their property transactions would have settled.
As their financial PoA, Toby could also access their bank accounts as necessary to pay bills and legal fees. Financial Powers conferred in the PoA would also allow Toby to invest Gwyneth and Paul’s retirement savings taking advantage of favourable market conditions. With some foresight, and careful planning, the added expense, delay and stress could have all been avoided.
Debunking some common misconceptions
1. A PoA is only for those who have lost capacity
The welfare powers of a PoA only come into effect should you lose mental capacity and are no longer able to act, make decisions, communicate decisions, understand decisions or retain the memory of decisions, however, the financial powers in a PoA can be used concurrently, when you still have mental capacity.
Granting a PoA does not mean you are relinquishing control of your own affairs – it simply allows a trusted individual as your attorney to step into (and back out of) your shoes if required.
2. A PoA is a costly and an unnecessary expense
The cost of not having a PoA in place is far greater than the cost of putting the deed in place and having the deed registered with the Office of the Public Guardian (Scotland).
Most of us wouldn’t begrudge payment of an insurance premium before jetting off on holiday – the cost of putting a PoA in place is like an insurance against future unknowns.
3. A Power of Attorney is only for individuals
In the event of Gwyneth and Paul also running a business, the operation of their business could also be difficult to manage. In the main, sole traders and small independent or family run businesses, cannot afford for the continuity of their business to stop, even for a short time. A Power of Attorney can incorporate powers to allow your chosen attorney to help keep your business moving if you can’t and are stuck overseas for some reason.
Following a recent ABTA report confirming the majority of the UK population intend to holiday abroad in 2025, the idea of getting a Power of Attorney in place should perhaps be much closer to home for many.
Published 15 May 2025
