After September 2007 it will no longer be possible to create Enduring Powers of Attorney (EPAs). These are being replaced by Lasting Powers of Attorney (LPAs), which are likely to be more complex and expensive to create.
Morrisons Solicitors LLP is advising clients to draw up EPAs before it is too late. You do not need to see a solicitor to set up an EPA but you may find it helpful to obtain advice before executing the document to make sure that it is valid and to consider every angle.
Below is an outline of the different legislation and documentation involved.
The Power of Attorney
This is a legal process where you hand over to someone else the power to make decisions on your behalf. This can include acting in your financial affairs and dealing with property. The Power of Attorney can only be effective whilst you continue to be mentally capable of managing your affairs.
The Enduring Power of Attorney (EPA)
The EPA is a special type of Power of Attorney which allows an attorney’s authority to continue, even if a person has become mentally incapable of managing his or her own affairs. This is an important part of financial planning, which enables you to choose someone you trust to look after your affairs.
Incapacity can lead to difficulties for the family if a mentally incapable person does not have an EPA (or an LPA after September 2007). In its absence, it would be necessary for an application to be made to the Court of Protection (a public body which looks after the affairs of people with mental incapacity), to appoint a ‘receiver’, which is an expensive and time-consuming process.
The EPA is simple to create by completing a four-page form. It can take immediate useful effect or, if you wish, can be used only if you become unable to manage your affairs in the future. The authority of the attorney can deal with all of your affairs or may be limited to specific matters, such as buying or selling a house, or operating a bank account.
If you become mentally incapable, your attorney is required to register the EPA at the Court of Protection and you will not be able to cancel it. Of course, before an EPA has been registered you can cancel it at any time.
An existing EPA will continue to be valid after Lasting Powers of Attorney are introduced but EPAs can only continue to be signed up to and during September 2007.
Lasting Powers of Attorney (LPAs)
There will be two types of LPAs. One will cover decisions over health and welfare and the other will be for finance and property. Both forms are likely to be 10 pages long, and a certification of the mental capacity of the person granting the LPA will be required in both cases.
Jessica Richards, Solicitor, says, “Whereas EPAs can be used by your attorney immediately, LPAs will need to be registered before they can be used and there will be a fee for this, although the amount has yet to be confirmed."
Morrisons has considerable experience in the area of powers of attorney and we are happy to discuss making an EPA either at our offices, or by home visit if necessary. If the deadline is missed, you may find it helpful to consult a solicitor when creating an LPA to make sure that your particular requirements are met.
