Enduring Powers of Attorney
AN ENDURING POWER OF ATTORNEY - DO YOU NEED ONE?
Since 1985 it has been possible to make an Enduring Power of Attorney (‘EPA') This is a document enabling you to choose someone to manage your financial affairs, which will remain in place even if you become mentally incapable of looking after your affairs.
If a person has lost mental capacity to deal with his affairs and he does not have an EPA his family will discover that they have no legal authority to access bank accounts sell or make investments, sign documents and no authority to sell the family home and purchase a more suitable home. Someone would need to apply to the Court of Protection to become a receiver which would be a time consuming and very expensive process.
WHY SHOULD I MAKE AN EPA NOW?
Sections of The Mental Capacity Act 2005 are already in force but the sections in relation to EPAs will come into force on 1st October 2007. It will no longer be possible to make a new EPA. Instead, there will be a new type of document called a Lasting Power of Attorney (LPA) and the LPA process will become more difficult and expensive than the existing procedure. It may, therefore, be sensible to make an EPA now.
WHO CAN I APPOINT AS MY ATTORNEY IN MY EPA?
You can appoint your spouse, civil partner, your children or other relatives or friends. Alternatively you can appoint a professional person such as a solicitor. You can appoint more than one person. Your attorney or attorneys will have significant powers over your financial affairs so you should have complete trust in the person you propose to appoint as your attorney.
WHAT WILL HAPPEN TO ENDURING POWERS OF ATTORNEY AFTER 1st OCTOBER 2007
Any EPA made before 1st October 2007 will still be valid and will remain in force unless cancelled by the person who made the EPA or the court.
DIFFERENCES BETWEEN AN ENDURING POWER OF ATTORNEY AND A LASTING POWER OF ATTORNEY
- An EPA relates only to property and financial affairs.
- An LPA may relate to property and financial affairs. It will also be possible to make an LPA in relation to a persons health and welfare; this is a new and welcome development.
- An LPA will enable a person to make decisions (on behalf of another person) about giving and refusing consent to medical treatment for that person.
- The cost of making an LPA will be significantly greater than the cost of making an EPA as more detail is required including a certificate from an independent person that the person making the LPA is doing so voluntarily and understands what they are doing
One of the more worrying aspects is that although an LPA has to be registered before it can be used there is no point at which the Attorney has to declare that the Donor has lost mental capacity and therefore the Donor can always access his/her funds even when he/she may not be capable of looking after them.
Under the law relating to EPAs if the donor loses mental capacity then the EPA has to be registered with the Public Guardianship Office and once registered, the Donor no longer has access to his accounts etc which are protected by the Attorney who has full control over the Donor's financial affairs.
IN SUMMARY
The formalities from the end of 2007 will be more complex and the cost higher.
When creating any power of attorney you should take the advice of a solicitor experienced in this type of work in order to ensure that it meets your specific requirements
Please bear in mind that sadly you may lose the ability to act for yourself at any time in your life, (perhaps because of a stroke or an accident). It is not just the elderly who should take advice on this topic. It is something which is preferably considered sooner rather than later.
If you would like more details on setting up an EPA please contact Geoffrey Dootson (who is a member of STEP) on 01704 577171 or Eve Austin on 01704 531991 / 515801
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