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If because of age, infirmity, accident or illness you become unable
to pay bills, deal with investments, write cheques or look after
your own affairs your family and friends cannot automatically take
over. This means that bills may not be paid, your money cannot be
withdrawn or transferred and documents cannot be signed.
An ordinary
Power of Attorney is a legal document, granting authority to
a person you choose to act on your behalf, for example, if you are
on holiday, abroad or suffer a short term illness or injury. An
ordinary Power of Attorney remains valid until you cancel it, die
or become mentally incapable of managing your own affairs.
You can appoint
one or more attorneys, for example a son or daughter and a professional,
to act together ('jointly') or independently of each other ('jointly
and severally') to deal with all your affairs or just certain things.
You can also impose restrictions for example if you don't want your
attorney to be able to sell your home.
The major disadvantage
of an ordinary Power of Attorney is that if you become mentally
incapable, say because of a stroke, accident or old age, then just
when you most need it, the ordinary power becomes invalid. Lengthy
proceedings then have to be started for a 'Receiver' to be appointed
for you by the Court of Protection to look after your affairs. The
process is expensive and while it is underway your finances may
be frozen, bills may not be paid, your affairs will not be looked
after properly and you will have no say in relation to your own
affairs.
The solution
is to make an Enduring Power of Attorney (EPA) provided
you do so before 30 September 2007 or a Lasting Power of
Attorney (LPA) which will replace the Enduring Power of
Attorney from 1 October 2007. Enduring Powers of Attorney made
before 1 October
2007 will remain valid.
From 1 October
2007 when the Mental Capacity Act 2007 comes into force Enduring
Powers of Attorney will be replaced by two different
types of Lasting Power of Attorney which cannot be used until
they have been registered with the Office of the Public Guardian:
- The
Property and Affairs Lasting Power of Attorney can
be used immediately and allows your appointed attorney to manage
your
property, money and affairs.
- The
Personal Welfare Lasting Power of Attorney can only
be used if you lack the capacity to make your own decisions
relating
to your personal welfare or care such as deciding where to
live
or
consent to or refuse medical treatment.
Once
you become incapable of managing your affairs it is too late
to appoint
an attorney, so practically and financially, it makes sense to
appoint
an attorney now. The appointment of an
attorney means that there is someone you trust ready to take
over if you
cannot look after your affairs.
An EPA or LPA
is a way of insuring against the problems which can arise should
you
lose your capacity to manage your own affairs. It does everything
an ordinary Power of Attorney does and continues if you become
mentally
incapable of managing your own affairs. You can plan ahead, choose
a trusted relative, friend or professional to look after your
affairs
for you and give them your instructions whilst you are able to
do so, just in case you become incapable of managing your own
affairs
at some future date.
Hopefully your
EPA or
LPA will never need to be used and can be signed and stored
with
your Will ready to be used only if you become incapable. An EPA
or LPA does not restrict your right to look after your own affairs
if you
are capable of doing so. You can revoke or change the appointment
at any time provided you have the mental capacity to do so and
can appoint more than one attorney.
Your attorney
must act in your best interests and cannot for example use your
money for their own benefit or make substantial or unusual gifts
without the consent
of the court.
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