Enduring Power of Attorney: Dont Leave it Too Late to Make One!
From April 2007, the Enduring Power of Attorney (EPA) will be no more. The legal effect of an EPA already made under the current law will be preserved so existing EPAs will continue to be valid from April next year but Lasting Powers of Attorney (LPA) will replace EPAs.
Both types of power of attorney enable a person to hand power over their financial affairs to someone else. The power of an EPA is restricted to a person’s property and money, but the LPA will extend to personal welfare as well as property matters. Whether you complete an EPA now or an LPA in the future, it is important to safeguard your financial affairs and ensure that, in the event of your mental incapacity, you have appointed someone to look after your finances. If you do not, your spouse or family could discover they have no legal authority to access your bank accounts, sell or make investments, sign documents and, if necessary, buy or sell property on your behalf.
The advantage of an EPA is that it can start right now while you are well, if you want it to, which may be helpful if you are going on holiday or just don’t feel up to managing your finances any more. It will also continue to be a valid legal document even after you have lost your capacity. Most people carry on managing their own affairs while they are able and hand over responsibility later. In contrast, when a person makes a LPA, first they will need to complete a certificate stating that they are mentally competent and not making the LPA under the influence of someone else. They will then need to register the LPA with the Court and pay a fee to validate it from the point at which it is to be used, regardless of an individual’s capacity. The advantage of an EPA is that it is only when a person has lost their capacity that the document has to be registered with the Court of Protection and a fee paid.
The new regime will mean that an LPA cannot be used before registration with the Court. While this may prevent unauthorised use, it will also reduce the flexibility offered by EPAs which, for example, would allow you to delegate some jobs while retaining responsibility for others. As the formalities to complete an LPA are more complicated than an EPA it will take more time to complete and cost more. This firm’s advice is therefore simple; make an EPA now before its too late!
