Powers of Attorney

During the month of September 2007, along with many other private client lawyers across the country, I was swamped with the preparation of Enduring Powers of Attorney (“EPAs”). This was due to a deadline set by the Mental Capacity Act 2005, for the execution of EPAs to come to an end. From 1 October 2007, EPAs were replaced by a new document known as a Lasting Power of Attorney (“LPA”).

A Power of Attorney is a document by which you (“the donor”) authorise someone else to act on your behalf, (“The attorney”) usually in relation to financial matters. The problem with an ordinary Power of Attorney is that it is automatically revoked by law, if the donor loses his/her mental capacity. Therefore at the very time the power of attorney is needed, it can’t be used. To get around this problem, the EPA was introduced in 1985. An EPA is a relatively short document (usually 4 to 6 pages long), produced in a standard form. An EPA contains a statement of the donor’s intention that the power shall continue even if he/she becomes mentally incapable. It can be used as an ordinary Power of Attorney up until that point but when the donor begins to lose his/her mental capacity, then following a simple registration procedure with the Court of Protection, the Attorneys can continue to operate under the EPA.

It was standard practice for lawyers involved with the preparation of Wills, to recommend that EPAs were made at the same time. In many cases the completed EPAs were stored “for a rainy day”, almost as insurance against loss of mental capacity. Being relatively simple in form, EPAs were straightforward to prepare and therefore relatively cheap to produce. However, a small percentage of EPAs were abused and as a result, The Mental Capacity Act 2005 introduced wide spread changes, including the replacement of EPAs with LPAs. Although it is no longer possible to execute a new EPA, anyone who has an existing valid EPA, can continue to use that under the old regime.

To start with, lawyers were suspicious of the new LPAs and in particular were concerned about the cost of putting them in place. The standard form LPA document is 25 pages long and there is a greater onus on the lawyer who is producing the document to go through every aspect in minute detail. The LPA includes a section to be completed by a certificate provider, usually a solicitor, which confirms that the document has been fully explained to the donor and that that person has the necessary capacity to execute an LPA. An LPA cannot be used before it has been registered with the Court of Protection, regardless of whether you have or lack the mental capacity to handle your own affairs. A fee is payable to the Court of Protection, upon registration and the registration process currently takes about two months.

One positive aspect which has arisen from the introduction of LPAs is that a gap has been filled. EPAs could only give someone authority to assist with financial affairs and not with the making of day to day decisions, such as where you live, how you are treated, etc. There are two different types of LPA. The Property and Affairs LPA replaces the EPA but there is also a Personal Welfare LPA, which allows you to authorise someone else to make decisions on your behalf, in relation to aspects of daily living and can even extend to matters of life support. One significant difference between the two types of LPA is that a Personal Welfare LPA can only be used if the donor lacks capacity to make the particular decision required.

The change from EPAs to LPAs has deterred people from considering this area of protection, mainly because the process now requires more time/thought and the costs have increased. However, the existence of an EPA or LPA can be invaluable, particularly for someone who is elderly or infirm. They can give the donor peace of mind and make life much easier for those close to him/her, if an issue of incapacity arises. Take, for example, an elderly relative who has a stroke and is no longer able to communicate or sign. Without an EPA or LPA you will have no authority to assist with the running of their affairs. It will be necessary for someone to apply to the Court of Protection to be appointed as Deputy. Incapacity can strike the young as well as the old and some of the most difficult cases I have encountered have involved middle aged business men.

Here at Bright, we can advise you on all aspects relating to existing EPAs and we can also assist you with the preparation and implementation of ordinary powers of attorney and LPAs. We are used to dealing with the sensitive issues that arise in the preparation of Powers of Attorney and are quite happy to make home visits for those who are unable, for any reason to come into the office.

Please contact me, Vicky Bligh, if you would like to discuss a Power of Attorney related issue.

I can be contacted on 01752 764848 or by email to vicky.bligh@brightllp.co.uk .