Catherine Laband of Jackaman Smith & Mulley solicitors looks at the significant changes which are due to come in soon regarding the grant and regulation of Powers of Attorney.

Making an Enduring Power of Attorney (“EPA”) is often is very sensible step to provide the reassurance of appointing the person who you would wish to deal with your financial affairs, if you ever become unable to continue looking after matters yourself. Although the appointment of an attorney should always be carefully considered, the actual process of appointment is fairly straightforward at the moment.

This will all change later this year when the present form of EPA will be replaced with the new Lasting Power Of Attorney (“LPA”) under the Mental Capacity Act 2005.The new law is due to become effective from October when two separate forms of power will be introduced; the Financial LPA and the Welfare LPA.

The Financial LPA (as its name implies) will cover financial matters only, and will effectively replace the existing Enduring Power of Attorney form. However, EPA’s in their current from which are entered into before the changes in October, will remain valid under the new regime.

The Welfare LPA is entirely new and will cover only welfare and medical matters. Under this type of Power it will be possible for the donor to authorize someone to make medical decisions and consult with donor’s doctors on treatments etc, if the donor is not able to do so. It will also authorize the attorney to make arrangements for housing and nursing care.

The donor may choose to grant either a Financial LPA or Welfare LPA; or may grant both but to different people.

Under the new arrangements there will also be specific restrictions on those who can be appointed as Attorneys; together with requirements to register the LPA at the Public Guardianship Office before the Attorney can start acting under the power. (At the moment the power only has to be registered if the donor becomes mentally incapable.)

These changes are designed to afford greater protection to individuals (particularly the old or infirm) from being abused by those they have entrusted their affairs to. In one sense they represent important checks and balances which good practice would dictate in any event. However, the statutory nature of the new procedures and extended responsibilities under the Welfare LPA inevitably mean that the process for professional advisers in advising and (where appropriate) setting up LPA’s for clients will be more involved and expensive.

Far more information will have to be taken, checks made for eligibility and some time spent carefully advising on the options to ensure that informed and appropriate decisions are made by the donor. Individuals will need to think carefully about the extent of authority they will be willing to provide under the LPA; and whether to grant both types of power. Likewise, whether different attorneys should be appointed to cover their financial affairs and welfare matters. Potential attorneys will also need to be happy to accept the potential responsibilities and decision making which the LPA will confer.

If you are considering an Enduring Power of Attorney, and it is appropriate to your circumstances, then it may well be worthwhile making the arrangements before the new forms and procedures come into force. Once the new regime is in place, it is likely to be a more expensive and potentially complicated arrangement to set up.

For further information contact Catherine Laband on 01473 255591 or via email at catherine.laband@jsm.co.uk