Make an Enduring Power of Attorney before it is too late

You may have made a Will, but have you made an EPA?

With the changes that are due to take effect this October, it is worth considering drawing up an Enduring Power of Attorney (“EPA”) now.

An EPA is a legal document, where you appoint “Attorneys” to look after your financial affairs if you become unable to deal with them yourself, either on a short term or a long term basis.

Although EPA’s are commonly associated with the elderly and dementia, it should be noted that it is only possible to draw up an EPA if you have mental capacity. If left too late, an EPA cannot be drawn up and the family of a person who has lost the mental capacity has only one option – to apply to the Court for a Receivership order – a very costly, time consuming and restrictive process.

The Mental Capacity Act 2005 came into force in April 2007 and after September it will not be possible to draw up an EPA. Instead two Lasting Powers of Attorney (LPA) will be available – one for Property and Affairs (to replace the existing EPA) and the other for Welfare, to appoint Attorneys to make welfare decisions on your behalf.

The new LPA Property and Affairs has a similar function to an EPA, but once signed, it cannot be used by the named Attorneys until it is registered at the Court (this registration process is not always required under an EPA). The registration process is likely to involve a £150 Court Fee and will result in several weeks of delay which the Court waits to see if anyone objects to the registration. This will undoubtedly mean that the Attorneys will have difficulty in dealing with the person’s finances quickly, especially in an emergency.

The new LPA’s are a more complicated document and will therefore be more costly to set up if using a Solicitor’s services. It will also be necessary to find a person who can sign a certificate confirming your mental capacity. The Office for the Public Guardian (OPG) sets out criteria for who can provide this certificate.

It is worth noting that existing EPA’s made up to 1st October 2007 will remain valid after this date.

Other changes are taking place. Receiverships (where a person has lost mental capacity and no EPA exists) will become “Deputyships” and the fee structure relating to Receivership/Deputyship Orders will also be amended.

So, if you have been considering drawing up an EPA and have delayed because “I’m still fit and healthy and I’ll do one when it looks like I need to” then it is highly advisable to speak to your solicitor and arrange to draw up an EPA before October.

For further advice, please contact the Private Client Department at Parrott and Coales LLP on 01296 318500.

Article written by Jennifer Turrell June 2007