Stephen Abbott of Jackaman Smith & Mulley solicitors looks at the significant changes introduced this month to the grant and regulation of Powers of Attorney.

Making an Enduring Power of Attorney (“EPA”) is often a 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 has been fairly straightforward up until now.

This has now all changed with the present EPA being replaced with the new Lasting Power Of Attorney (“LPA”).The new law became effective from 1st October and has introduced two separate forms of power; the Financial LPA and the Welfare LPA.

The Financial LPA (as its name implies) covers financial matters only, and effectively replaces the previous Enduring Power of Attorney form. However, EPA’s in their old form entered into before October will remain valid under the new regime.

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

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

The LPA must contain a statement by a Certificate Provider confirming you fully understand the form and the powers of the attorney.

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.

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. You will need to think carefully about the extent of authority you will be willing to provide under the LPA; whether to grant both types of power; and if so whether different attorneys should be appointed to cover your financial affairs and welfare matters.

With new procedures and changes in the law in the area, it is now more important than ever that you obtain proper legal advice if you are considering granting a Lasting Power of Attorney, to make sure that it is appropriate to your circumstances.

For further information contact Stephen Abbott or Maya Ribbands on 01379 64355 or via email at stephen.abbott@jsm.co.uk and maya.ribbands@jsm.co.uk

October 2007