28-03-2008
Lasting Powers of Attorney - a new regime
BPE’s Private Client Partner Sophie Endersby says a new system of appointing someone to look after your affairs if you are physically or mentally incapable of doing so has advantages and disadvantages when compared to Enduring Powers of Attorney.
Lasting Powers of Attorney (LPAs), replaced Enduring Powers of Attorney (EPAs) late last year, with some critics arguing that the new system was more expensive and burdensome, with little improvements for the donor.
It is true that EPAs were simple documents that were capable of being downloaded off the internet and completed quickly without the need for any legal advice. Although the new system appears to involve a great deal more work, with a longer 20-page document to fill in, it is in fact no more difficult to complete. There are also now far more checks and balances in place to ensure people fully understand the power they are giving away to others.
A case study helps to explore the differences between the old and new systems. Imagine Doris, a recent 70-year-old widow with three adult children, two of whom she has a close relationship with, but sadly no contact with the eldest child. Under the old system the two youngest children, worried about mum’s health and her “vagueness” talk to her about an EPA and suggest they become her attorneys.
Doris, who obviously trusts both her children, says it sounds like a good idea to allow her two youngest children authority to deal with her day-to-day bills and finances. They download the forms from the internet, get Doris to sign them and have the neighbours act as witnesses.
Under this old regime, no-one gives Doris any advice about exactly what power she is giving away and what the children, as her attorneys, can do for her. The children will have complete access to her savings, investments and even have the ability to sell her house.
Doris may well be happy for them to have this power, but no-one is pointing out the potential pitfalls. Sadly it is not necessarily the children who would act inappropriately but they may be influenced by non family members. As Doris and her family can just complete the forms themselves, who is to say Doris has the mental capacity to validly complete the forms?
Under the old regime the only court involvement was when the EPA was registered. The children would need to register the EPA with the court when, in their opinion, Doris was mentally incapable of managing her own affairs. The children would need to decide when this was so could, potentially, either register it when Doris was still mentally capable or instead not register it soon enough, leaving Doris to make decisions she was incapable of making.
On registration of the EPA, certain family members would need to be notified. This would have included the third child with whom Doris was not in contact with and who may perhaps, unjustifiably object.
Lasting Powers of Attorney (LPAs), replaced Enduring Powers of Attorney (EPAs) late last year, with some critics arguing that the new system was more expensive and burdensome, with little improvements for the donor.
It is true that EPAs were simple documents that were capable of being downloaded off the internet and completed quickly without the need for any legal advice. Although the new system appears to involve a great deal more work, with a longer 20-page document to fill in, it is in fact no more difficult to complete. There are also now far more checks and balances in place to ensure people fully understand the power they are giving away to others.
A case study helps to explore the differences between the old and new systems. Imagine Doris, a recent 70-year-old widow with three adult children, two of whom she has a close relationship with, but sadly no contact with the eldest child. Under the old system the two youngest children, worried about mum’s health and her “vagueness” talk to her about an EPA and suggest they become her attorneys.
Doris, who obviously trusts both her children, says it sounds like a good idea to allow her two youngest children authority to deal with her day-to-day bills and finances. They download the forms from the internet, get Doris to sign them and have the neighbours act as witnesses.
Under this old regime, no-one gives Doris any advice about exactly what power she is giving away and what the children, as her attorneys, can do for her. The children will have complete access to her savings, investments and even have the ability to sell her house.
Doris may well be happy for them to have this power, but no-one is pointing out the potential pitfalls. Sadly it is not necessarily the children who would act inappropriately but they may be influenced by non family members. As Doris and her family can just complete the forms themselves, who is to say Doris has the mental capacity to validly complete the forms?
Under the old regime the only court involvement was when the EPA was registered. The children would need to register the EPA with the court when, in their opinion, Doris was mentally incapable of managing her own affairs. The children would need to decide when this was so could, potentially, either register it when Doris was still mentally capable or instead not register it soon enough, leaving Doris to make decisions she was incapable of making.
On registration of the EPA, certain family members would need to be notified. This would have included the third child with whom Doris was not in contact with and who may perhaps, unjustifiably object.
