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Take the struggle out of Power of Attorney
As people get older, it sometimes becomes more difficult for them to look after their finances. Power of Attorney exists to allow a friend or relative to take control of affairs - temporarily or permanently - should the need arise.
But what does it actually mean and how does it work? Sarah-Jane Herron, Probate Executive at Barr Ellison, explains more.
"Most people's first experience of Power of Attorney comes when they get involved in an Enduring Power of Attorney (EPA). This power allows someone to appoint family or friends to deal with their financial situation should they lose their capacity to do so. It's generally a permanent state of affairs caused by impending or threatened loss of mental clarity but can be used as a temporary measure should they break a limb, need a long stay in hospital or be abroad for a long while; any situation where they are unable to take care of their affairs for a long period.
The Power gives the relative or friend wide control over financial affairs, large and small. It covers day to day issues such as paying direct debits as more substantial issues including the selling of property should money need to be raised to fund a stay in a care home, for example. It is possible to put a restriction on how the Power can be used.
Currently, it's only at the point that the mental incapacity kicks in that the EPA needs to be registered with the Court of Protection. This in effect gives the court's seal of approval to the attorney's appointment and involves notifying relatives that the EPA is being registered and the attorney has power over affairs. Anyone who has financial dealings with the subject of the EPA, such as banks, building societies and utility companies, will need a certified copy of the registration form so they know who to deal with.
And filling in the form is easy, you can probably go to the newsagents and get one.
But if someone is 'borderline incapable' the system is potentially open to abuse. All an EPA requires is the signature of the person appointing the attorney ('the donor') and the attorney themselves. Although all signatures need to be witnessed independently, there's no legal requirement for a third party, medical or otherwise, to be directly involved to ensure everything is above board.
I'd always recommend that a doctor is consulted at this stage to ensure there's no comeback later.
In April, however, a new law comes into effect introducing a Lasting Power of Attorney (LPA). As well as covering financial situations, these new powers can cover issues of health and allow the attorney to take decisions such as whether the person who is mentally incapable needs to go into a care home. Existing EPAs will still be legal, although it will not be possible to create new ones.
The financial section of the LPA will also change in that it can't be brought into effect before it has been registered with the courts. You can't just sign it and use it any more.
One of the more unusual ideas to come out with this new legislation is the concept that someone has to sign a form certifying the person who wanted to appoint an attorney was medically competent at the time they made the decision. Alongside the expected 'approved signees' such as doctors and solicitors stand librarians and shopkeepers. How much experience the latter have in such matters is open to debate, but as GPs and solicitors are able to charge you can see the attraction.
Where it is not clear if the person is capable, we'd strongly recommend a GP is involved, but in an ideal world, LPAs will be completed by those wanting to make their wishes clear before they become incapable."
For further information contact Sarah-Jane Herron.
The information given in this article is of a general nature only and should not be considered as advice applicable to any particular situation for which specific request should be made to us.
