The Big Change
In the past, an individual (‘the donor’) could enter into an Enduring Power of Attorney (‘EPA’) allowing the donor to appoint someone to act on their behalf (‘the attorney’) in relation to their property and financial affairs if they physically or mentally could not do so themselves.
EPAs could be made up until 30th September 2007 when they were replaced with Lasting Powers of Attorney (‘LPA’). Although no new EPAs can be created, an existing EPA signed before 1st October 2007 remains valid.
There are two types of LPA: Property and Financial Affairs Lasting Powers of Attorney and Health & Welfare Lasting Powers of Attorney. The introduction of LPAs not only widened the area of a donor’s life in which an attorney could act, but it also created a new process which the donor had to follow in order to enter into the respective LPAs.
The Big Questions
Lots of people granted EPAs which remain effective. Attorneys who were appointed to act on the donor’s behalf in relation to their property and financial affairs may now need to use their powers. This can raise a number of questions.
The donor is losing capacity, what shall I do as attorney?
Once the donor is beginning to lose or has lost mental capacity, the EPA must be registered with the Office of the Public Guardian (‘OPG’). This process includes giving notice of the registration to the donor and three other people from a predetermined list, which includes various family members. This is a safeguard allowing them to object to the registration if they have any concerns. If no objections are raised, the EPA will then be registered by the OPG and returned to the attorney for their use in administering the donor’s financial affairs.
What if there is a restriction in the EPA in relation to it being released to the attorney?
When entering into their EPA, some donors took the view that they did not want their attorney to be involved in the administration of their property and financial affairs until they had lost capacity. In order to ensure this was the case, the donor would often include a restriction in the EPA stating that they did not want the EPA released to their attorney without steps being taken to confirm that they had lost capacity.
In such circumstances, it is necessary for medical evidence to be obtained from the donor’s GP or consultant to confirm that the donor has lost capacity and is no longer capable of managing their own affairs. Once this has been established it will then be possible for the EPA to be released and registered with the OPG.
What if the attorney named in the EPA has also lost mental capacity/has died?
This is often the case where husband and wife appoint each other as their sole attorney and the appointed spouse has either predeceased or has also lost mental capacity. In such circumstances the appointment will fail and it will be as if the EPA had not been created. A second EPA may have been made by the donor appointing a substitute attorney, however, this is not always the case.
If no substitute attorneys have been appointed, then the donor may be able to appoint a new attorney using a Property and Financial Affairs LPA if they still have the required mental capacity to do so.
However, if the donor has lost mental capacity, they will not be able to enter into an LPA, and a Deputyship Application will need to be made to the Court of Protection. This process allows someone (usually a family member) to be appointed by the Court to act on behalf of the incapacitated donor in relation to their property and financial affairs.
If you have an EPA, it is advisable to review it to ensure it is still relevant and applicable to your circumstances. If an attorney has died, is in ill health or is losing or has lost mental capacity then it is advisable to look into making an LPA, appointing new attorneys whilst you still have capacity.
If you are an attorney for a donor under an EPA who you think is beginning to lose or has lost mental capacity, then you must take the necessary steps to register the EPA so that your appointment under the EPA remains effective.
If you are in a position where a family member or friend is beginning to lose or has lost mental capacity and no provision has been made for the appointment of an attorney, then it is advisable to make a Deputyship Application to the Court of Protection. As this can be an extremely lengthy process it is advisable to act in relation to this sooner rather than later as the time taken to make the application can have serious consequences on the incapacitated person’s financial affairs.
For further information, please contact Richard Marshall on 0191 232 8345 or email: email@example.com