Enduring Powers of Attorney (EPAs) – not for much longer
For more than 20 years an EPA has been the means by which it has been possible to appoint a person, usually a family member, to look after one’s money, investments and property should one become mentally incapable.
For many people EPAs have proved to be very valuable documents but they are perceived to suffer from certain failings e.g.
- Some attorneys fail to observe the requirement to register the EPA with the Court of Protection at the onset of the donor’s incapacity.
- Many attorneys are unable to make any proper assessment of the donor’s capacity.
- The fact of registration necessarily gives rise to a presumed lack of capacity on the part of the donor.
- EPAs are limited to a person’s money, investments and property. The attorney has no direct say in the person’s welfare.
To address these and other issues the Mental Capacity Act 2005 introduces a new document known as a Lasting Power of Attorney (LPA). LPAs are scheduled to be available from 1 October 2007 and from that date it will not be possible to make an EPA. EPAs made before then however will remain valid, in the usual way, until revoked or the donor dies.
The main differences between a new-style LPA and the old-style EPA will be:
- Two forms of LPA will be available, one in respect of money, investments and property and one in respect of welfare matters. The two instruments can appoint different attorneys and can be registered and used at different times.
- An LPA will have to be registered with the Office of the Public Guardian before it can be used.
- The donor can select the persons to be notified if an application is made to register the LPA (with an EPA the persons to be notified are limited in number and taken in priority from a prescribed list).
- Each LPA must contain a certificate that at the time the LPA was made the donor understood its purposes and the scope of the authority it conferred, and that no undue influence was used on the donor to create it. The certificate may be given by anyone known to the donor for more than two years (other than a relative or carer) or by a very wide class of persons which includes not only a solicitor and doctor but also “a local business person” and “social worker”.
Each type of LPA will have to be made on a statutory form which will be much longer than the current EPA form.
All this means that the time required to complete an LPA will be considerably greater than with an EPA, and it is therefore likely to cost much more. Moreover the proposed fee for registering an LPA with the Office of the Public Guardian is £150.
That is not all. Once the LPA is in place the role of the attorney will be far more burdensome than is currently the case under an EPA. He or she will be expected to abide by a Code of Practice issued under the Mental Capacity Act 2005, the draft of which was laid before Parliament on 22 February and runs to 302 pages. The following extracts provide a flavour of what is in store for an attorney under an LPA:
(1) Before taking any action under the LPA the attorney will have to be satisfied that the donor lacks the capacity to make that particular decision. The donor’s capacity has to be assessed each time a decision has to be made, and has to be assessed with reference to his/her capacity to make that particular decision.
(2) The attorney must ensure the donor has all the relevant information about the decision before assessing his/her capacity to make it.
(3) If the attorney believes the donor lacks capacity to make a particular decision, the attorney will have to provide proof of this if his/her decision on behalf of the donor is later challenged.
(4) The attorney’s decision must be made in the best interests of the donor and in considering what these are the attorney will be expected to consult with any close relative who is interested in the donor’s welfare.
Two final points:
(i) Until 30 September 2007 it is still possible to put in place an EPA. If you are considering guarding against possible future incapacity our firm advice is to act now and put in place an EPA in the time available to deal with your money, investments and property. Most of the perceived failings of EPAs do not arise if responsible attorneys are appointed.
(ii) LPAs, despite their complexity and cost, will still be better than the only alternative i.e. having one’s money, investments and property administered through the intrusive, time-consuming and expensive intervention of the Court of Protection through the appointment of a receiver (or “deputy”, as a receiver will now be called).