FinanceWills & Inheritance TaxDo you know about the new change in powers of attorney? Do you know about the new change in powers of attorney?
06/11/2007
The good news is that, as a population, we are now living longer. But there is a downside.
Our physical health may not be matched by our mental health and instances of dementia and other mental disorders are growing. It is now becoming more likely that in the future, we will not be able to make decisions for ourselves and may become vulnerable to financial or other abuse.
Most professionals will now suggest that, as well as having an up to date will, you should also have a power of attorney completed and ready for use - just in case.
On 1st October 2007, the Mental Capacity Act 2005 came into force, replacing enduring powers of attorney (EPAs) with lasting powers of attorney (LPAs).
Under the current EPA, a person (the donor) can give someone else (the attorney) the power to make financial and legal decisions for them. Any EPAs completed before 1st October 2007 will remain valid and can stay dormant until such time as the donor becomes mentally incapable of taking care of their affairs or requires assistance with the administration of their affairs for any other reason.
If the donor loses mental capacity, there is some degree of supervision as, when the EPA is needed, it must be registered with the Court of Protection.
The new LPA is a longer and more comprehensive document. It allows the donor not only to choose attorneys to deal with their legal and financial affairs (like the current EPA), but also to make personal welfare decisions on their behalf, such as where the donor is to live and giving or refusing consent to medical treatment. Different attorneys can be chosen for the two types of LPA and the new form allows the donor to be much more specific about what they want the attorneys to do, and what considerations they should take into account when making decisions on their behalf.
Rather than being registered only if the donor has lost capacity (as with EPA), an LPA must be registered with the Office of the Public Guardian in all cases - even whilst the donor still has mental capacity - before it can be used. This offers the donor more choice and protection, as they have the time to sit down and discuss exactly how they would like their legal, financial and personal welfare to be handled, if they lose mental capacity.
Professionals or family members can be appointed to make certain decisions on the donor’s behalf in the future. This means the donor can be reassured that someone will step into their shoes should they be unable to make decisions. This may be on a permanent or temporary basis.
For instance, it is common for a husband and wife to appoint each other as their attorneys. Children or other family members may be appointed as replacement attorneys should the first choice not be available. If the donor becomes unwell and has a spell in hospital, they may need help in getting themselves back home with appropriate support, or finding suitable alternative accommodation. Funding issues at this time are complex and difficult to navigate, even if the donor has mental capacity.
It is recommended that powers of attorney form part of the essential documents that we should all have. Not only do they save the huge amounts of time and money needed to apply to the courts should a power of attorney not be in place, but they provide the peace of mind that someone we have chosen and trust will be there to look after our affairs.
More information can be obtained from the Public Guardianship Office on the first link below.
Members of the Solicitors for the Elderly can be checked out on the second link below.