Since the mid-1980s, a person has been able to sign an Enduring Power of Attorney (“EPA”) appointing the person/s to be entrusted with managing the individual's finances, if s/he became unable to do so personally at any time in the future. Amongst those most keen to enter into an EPA are people who have experience of the problems of managing such matters for an elderly or disabled relative, when no such appointment has been made!

An EPA can be considered as an insurance “policy”, put in place years before any incapacity arises and can be used where the future incapacity is physical (eg declining sight), rather than a mental inability to make decisions. Only when (if) subsequent mental incapacity arises, does the EPA have to be registered with the Court of Protection.

In April 2007, the Mental Capacity Act 2005 will replace EPAs with Lasting Powers of Attorney: one form of which will give the attorneys authority to make decisions re medical treatment etc (not just to manage assets, as at present) but the requirements for a LPA will be much more complex – exactly how complex is not yet clear as the final version of the forms has not yet been published – and a LPA will have to be registered with the Court of Protection before it can be used.

The expected requirements for Attorneys, under an LPA, to read detailed notes and sign certificates of this fact when they accept appointment (which could be years before they need to do anything under the power) and the complex requirements for the execution of the document (the current proposals require and independent person to discuss the document with the person granting the LPA and certify that the document is being entered into voluntarily and that it is fully understood by the grantor) are likely to deter people from entering into a LPA until need arises. As a result, the sudden onset of ill health might mean that more families are left without the necessary authority to act.

The requirement for registration of the LPA at the Court of Protection, before use, will also remove some of the current flexibility for attorneys under an EPA to assist if there is physical difficulty (eg loss of sight, problems signing papers) or if an ageing grantor wants the attorneys to deal with something s/he finds too complex to cope with (eg correspondence from the Revenue). Registration is intended to recognise that the grantor has lost the capacity to make decisions and direct action to be taken on his/her behalf.

However, EPAs executed prior to April 2007 will continue to be valid, even if the authority has never been used. Whilst there may come a time when an individual wants the wider support of a LPA, it would be sensible to protect against the possible problems of a sudden onset of incapacity by ensuring an EPA was safely in place within the next year.

For further advice please contact Mr Clive Preston at Griffiths Preston, Aldbury House, Dower Mews, 108 High Street, Berkhamsted HP4 2BL Tel: 01442 870277
Email: clive@g-paccounts.co.uk
Website: http://www.griffithspreston.co.uk/Herts/