Are Powers Of Attorney Worthwhile ?

17/08/2017

In a word – yes ! Lasting Powers of Attorney (LPA) replaced Enduring Powers of Attorney (EPA) nearly ten years ago on 1st October 2007. While they have had issues along the way with complex forms and delays at the Office of the Public Guardian, there is still an important place for them when planning for the future.

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With everything we do there is risk. When you drive to work there is a risk of an accident, but we still do this out of necessity. However, when planning for incapacity we do have a choice: create a Lasting Power of Attorney or use the route of Deputyship.

The change to an LPA brought about more robust safeguards including a section which needs to be signed to confirm the capacity of the Donor, as well as a section for the Donor to complete to advise individuals that they wish to be notified when the document is registered.

By creating an LPA, the Donor chooses who they would want to deal with their affairs. When planning for the future, especially relating to finances and personal welfare, choices are so important. Whilst cost and time are also significant factors, setting up an LPA is hundreds of pounds cheaper than the alternative and much quicker with these documents taking weeks, not months.

Donors need to consider carefully whom they wish to appoint as their Attorney and if the Donor is currently suffering with dementia, or other illnesses that affect their capacity, then a professional should be consulted to assist in creating these documents to ensure the most appropriate person is appointed to limit any potential fraud.

The sad story of Frank Willett, a Dunkirk and Normandy veteran, shows how Powers of Attorney can be misused – especially Enduring Powers of Attorney (due to limited checks and safeguards these documents have, which was the main reason for the change to an LPA) which was the document used to defraud Frank of his life savings by his neighbour.

Although no new EPAs can now be drawn up, one signed before that date remains valid and may still be registered with the Office of the Public Guardian (which is required when the donor begins to lose mental capacity). Unlike an LPA, an EPA can be used without registration for so long as the donor has mental capacity.

An EPA gives the person appointed as attorney the power to dispose of property, deal with financial affairs, sign documents and make purchases on behalf of the individual, and make usual gifts. The attorney does not have the power to make substantial or unusual gifts, or make decisions about personal care and welfare.

Clients with an EPA should consider (if feasible), with professional legal help, updating them to the more robust Lasting Power of Attorney to limit the possible risks.

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