Having an Enduring Power of Attorney ("EPA") in place is as important as having a current will.
An ordinary power of attorney gives another person (the attorney) the authority to act legally on your behalf to the extent that you specify in the power of attorney. If you were to have an accident or an illness, as a result of which you lost your mental capacity, your attorney's authority under an ordinary power of attorney would be automatically terminated. By contrast, the defining feature of an Enduring Power of Attorney ("EPA") is that your attorney retains authority, even if you lose your mental capacity.
If you have no EPAs in place, and you become mentally incapable, then those people who want to assist you will need to apply for Court Orders under the Protection of Personal and Property Rights Act 1988, in respect of both your property affairs and personal care and welfare.
Quite apart from the time and cost involved, the most distressing aspect for family members is that the Orders are effective for only three to five years. At the end of that period, a new Order must be obtained from the Court. Having EPAs in place eliminates this risk.
Public awareness of incidents of financial abuse by attorneys, especially in respect of elderly people, gave rise to changes in the law, which came into effect in late September 2008. The major objective of the reforms was to ensure greater protection for the Donor (i.e. the person giving authority to the attorney). One of the initial mechanisms to achieve this required that if a solicitor acted for both a husband and wife, who wished to appoint each other as attorney, that solicitor was unable to complete the process for them. Instead, it was necessary to involve two different solicitors, one to advise the husband and one to advise the wife. Three solicitors would therefore have to be involved.
The impracticality and additional cost of that procedure prompted the government to review those requirements. The 2010 Amendment to the Protection of Personal and Property Rights Act 1988 now states that if two people appoint each other, and they are both clients of the same solicitor, then that solicitor can give them advice and witness their signatures, without the need to involve other solicitors.
The law gives the Family Court the power to monitor the performance of your attorney, vary the terms of the EPA, or give directions to your attorney. It can also ask for accounts and records relating to your affairs, and it can revoke an attorney's appointment if it considers that your attorney is not acting in your best interests. Under the new EPA rules, a relative, doctor, or anyone else who believes that your attorney is not acting in your best interests can apply to the Family Court to have your attorney's actions reviewed.
The essence of the EPA has not changed. For property, you can appoint one or more persons as attorney. If you choose more than one person, you need to specify whether they are to act together (jointly) or whether they can act separately (severally). You can set up a succession arrangement in the EPA to cover the possibility that one of your attorneys dies or loses their capacity.
Your property EPA needs to state whether it can be used immediately, or only if you lose your mental capacity. By contrast, your personal care and welfare attorney can act only when you lose your mental capacity. You can appoint only one person for this role, although again you can appoint a number of people in succession. As with your will, you can revoke (cancel) your EPA, or vary it, at any time. EPAs cease to be effective when you die.
There is a tendency to regard EPAs as something required only in the later years of your life. However, EPAs are an essential part of your asset planning, and they should, along with your will, be reviewed on a regular basis."
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