LASTING POWERS OF ATTORNEY

The legal framework covering Powers of Attorney was amended from October 2007 to take in to account new provisions under the Mental Capacity Act.  These provisions aim to give greater protection to those who are granting a Power of Attorney, but as ever the greater protection for the donor of the Power is likely to increase the associated costs!

Presently it is possible for an individual to grant an Enduring Power of Attorney (EPA) to a relative or other individual whom they trust and will have power to deal with their property and financial affairs in the event of their being unable to do so themselves for whatever reason - be it as a result of an accident, incapacity or old age. The Power can be activated at any time with the consent of the donor, and at short notice if the donor is incapacitated.  If the donor of the Power is considered to be mentally incapable of understanding what is being done on their behalf then the Power must be registered with the Court of Protection. 

Power under an EPA is extensive and in some cases it has been felt that a donor could be under pressure or that the EPA could otherwise be misused to the detriment of the donor.  A new form known as a Lasting Power of Attorney was therefore brought in from October 2007.  The new LPAs will require first of all that when they are created a 'certificate of capacity' must be signed by a person authorised to issue such a certificate - usually a doctor or solicitor.  The signatory must satisfy themselves that the creator of the LPA understands and has  the mental capacity to make a decision regarding the document they are signing, and also that they are not being put under pressure to sign the document.  The LPA can then only be brought into operation on registration with the Office of the Public Guardian.  The Attorney will be under a legal obligation to act in the best interests of the donor, and must consider in respect of each and every decision as to whether the donor has the capacity to make the particular decision themselves, and consult the donor if this is the case. For instance an elderly relative may no longer have the capacity to remember to pay their household insurance, but they may have the capacity to express an opinion as to the choice of a care home.

The LPA will also allow the holder to make decisions on behalf of the donor in respect of health or medical matters, whereas an EPA is restricted to decisions regarding finance and property.  To this extent the LPA seeks to address the difficult questions which now often arise in respect of the advances in medical practice.

Until October it will continue to be possible to make a new Enduring Power of Attorney, and this will continue to have force after October.  After October it will only be possible to grant the new Lasting Power of Attorney.  Whether you wish now to create the cheaper and more flexible EPA prior to October, or whether you wish to wait and create the more protective LPA after October is a decision that you may wish to think about carefully and perhaps discuss with your family and your solicitor.  We would urge clients of all ages to consider creating one or the other, as we would urge you to create a will whatever your age.  Unfortunately we can all have accidents or sudden illnesses - ensuring that your affairs are in order at such a time can save your family further distress.