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A Power of Attorney has long been recognised as the appropriate authority to appoint agents to act on behalf of an individual (the Donor) but until 1986 a Power of Attorney ceased to have effect if the Donor became mentally incapable of continuing to give the requisite authority. In 1985, the Enduring Powers of Act introduced Enduring Powers of Attorney (EPAs) where the Attorney’s authority could continue, notwithstanding the mental capacity of the Donor.
Unfortunately, there have been many instances of abuse of the powers given by EPAs and the Mental Capacity Act 2005 provided that after the 30 September 2007, no new EPAs could be completed. From 1 October 2007 Lasting Powers of Attorney (LPAs) replaced EPAs although EPAs completed before that date will continue to operate as previously.
There are two types of LPA, those dealing with property and affairs and those dealing with health and welfare, but for the purposes of this article, we will only consider the Property and Affairs LPA. Unfortunately, the document is much lengthier than the EPA, it is 26 pages long! It is more flexible than the EPA in that the Donor can appoint substitute Attorneys and give guidance as well as, or instead of restricting the power. It is also possible to appoint Attorneys to act together in respect of some matters and together and independently in respect of others.
The main cause of the increased length of the document is the attempt to guard against abuse. The 2005 Act establishes the principle that the Donor must be supported to make his or her own decisions wherever possible and that any Attorney making a decision for a Donor must act in the best interests of the Donor.
Another safeguard incorporated into the LPA is the requirement that at least one qualified person certifies, that at the time of making the LPA, the Donor understood the purpose of the document and the scope of the powers given by it. The document cannot be used, irrespective of the mental capacity of the Donor, until it has been registered with the Office of the Public Guardian and there is an opportunity in the document for the Donor to name friends and relatives who are to be notified before the document is registered.
It is unfortunate that the increased complexity of the LPA means that legal fees in connection with its completion are generally higher than the fees charged for EPAs. The requirement that the document be registered before it is used also increases its cost. However, it should now be possible for a solicitor to assist with the completion of an LPA for approximately £300 plus VAT. Anyone who does not already have an EPA should seriously consider whether they should complete an LPA as a sensible precaution to enable trusted individuals to facilitate the continued management of personal and business interests in the event of the Donor’s incapacity. |
