SIGNpost : Enduring Power of Attorney (EPA)
Most of us are familiar with the advantages of making a
Will to document our wishes on death. However, we often overlook the
importance of establishing a framework for our requirements should we
become incapable during our lifetime.
There are many events and illnesses that can deprive us of our
ability to manage our own affairs. Strokes, Alzheimer's disease,
Dementia and accidents can all leave us with impaired mental capacity
and no longer able to perform simple functions like operating a bank
account, collecting pensions or paying bills.
In such circumstances, many people incorrectly assume that our
partners or family can simply take over the responsibility -
unfortunately this is not the case. Unless we legally nominate a person
to act on our behalf, the consequences can be terrible. Our assets can
be frozen and will fall under the control of the Court of Protection.
Whilst the Court provides an important safety net for the most
vulnerable it can be expensive, frustrating and intrusive for families
who were unaware of the need to set up an Enduring Power of Attorney.
What is an Enduring Power of Attorney?
There are a number of ways that a person can arrange to
have their financial affairs handled by someone else. Most can be
arranged at any time if the person has the "mental capacity" to manage
her/his affairs, but only an Enduring Power of Attorney can continue to
operate if the person loses their mental capacity.
An Enduring Power of Attorney is a legal document enabling
individuals, whilst they are still mentally capable, to decide whom
they would like to deal with their affairs, after they become mentally
Why is it so Important?
An Enduring Power of Attorney is the only way of ensuring
that, should our health and mental powers fail, someone in whom we have
complete faith and trust will manage our affairs.
Do not confuse this with a standard Power of Attorney or a living
will. A standard Power of Attorney provides no authority if a person
becomes mentally incapacitated. They tend to be set up by people if
they are going abroad for a long period of time or if people are
physically incapable of managing their own affairs - they can also be
time limited. Living wills have not been proved legally enforceable and
usually only relate to medical treatment.
What happens if I don't have one?
Unfortunately, under these circumstances an application
would have to be made to the Court of Protection, which oversees the
affairs of mentally incapable people, to appoint a receiver (normally
the nearest relative). The entire procedure may take many months to
sort out and, in the meantime, the assets can be frozen, creating
severe problems for you and your family. The cost and fees incurred can
also be considerable.
Who can appoint an Attorney?
The appointment is made by "the donor" who can be anyone
aged 18 or over who is mentally capable. The legal requirement is that
the donor is mentally capable of understanding what the Enduring Power
of Attorney is and what it is intended to do (If there is any doubt as
to the donor's mental capacity, the advice of a doctor or specialist
adviser may be required).
If the donor is unable to sign the document or make a mark, perhaps
because of a disability, it is still possible to execute the form by
having someone sign the form at the donor's direction and with an
additional witness present.
What is involved in establishing an Enduring Power of Attorney?
The wording of an Enduring Power of Attorney is
prescribed by regulation. There is a pre-printed form available from
legal stationers, although this does not have to be used. However, any
typed or word-processed version must use the exact words, including the
explanatory information and margin notes. An incorrectly worded or
completed form will be invalid. Your solicitor will be able to draw one
up for you, although they will likely charge a fee, or your local
Citizens Advice Bureau may be able to help you.
It is possible to nominate more than one person to act as Attorney.
If more than one Attorney is appointed, the donor must then decide how
they will be permitted to act. Jointly means that they must all act
together and cannot do so separately. Alternatively, you may wish for
them to act jointly and severally, which means that they can act
together but can also act individually if they wish. There is no limit
as to how many Attorneys can be appointed but it may be impractical to
have too many.
There are two types of authority you can grant. A "general
authority" allows the Attorney to carry out any transactions on the
donor's behalf, which the donor is legally able to delegate.
Alternatively a "specific authority" only enables the Attorney to deal
with the particular aspects of the donor's affairs that are specified
in the document.
Either type of authority can be subject to restrictions and conditions specified by the donor.
When do the Powers of Attorney begin?
This is an area that often causes confusion, and indeed
some people are put off establishing an Enduring Power of Attorney
because they are concerned that control of their affairs is immediately
The donor can make restrictions about when the Attorney's authority
begins and could, for example, decide that the power will only become
effective when the donor becomes mentally incapable. If no such
restrictions are made, the powers of the Attorney start from the date
they sign the document. As with all forms of restrictions and
conditions it is important to consider them carefully to ensure that
they do not defeat the benefits of making the appointment in the first
Cancelling an Enduring Power of Attorney
The donor can cancel or revoke an Enduring Power of
Attorney at any time whilst they remain mentally capable. This can be
done by simply establishing a new Enduring Power of Attorney and
signing a Deed of Revocation. There is no prescribed wording for such a
deed but ideally it should state the donor's wish to cancel the
original Enduring Power of Attorney, referring to the date and the
General Notes and Guidance
Attorneys can charge for their work i.e. solicitors or
accountants. Individuals can likewise take reimbursement for costs,
again subject to any restrictions applied by the donor.
Â Many individuals ask if it is appropriate to appoint an older
person as their Attorney and whilst there is no upper age restriction,
some consideration needs to be given. The death of your Attorney, after
the loss of mental capacity can create difficulties. This can be
overcome by appointing more than one Attorney. However, a power which
gives an Attorney the right to appoint a substitute cannot be valid.
Witnesses to signatures on the Power of Attorney should be neither
the Attorney nor the donor, and it is not advisable for a spouse or
partner to act as a witness. Neither the witness nor the Attorney
should sign if they believe that the donor is already incapable of
understanding what an Enduring Power of Attorney is and what it is
intended to do.
Many people believe that the Enduring Power of Attorney must
immediately be registered and that it is not valid until this is done.
This is in fact not the case. An Enduring Power of Attorney only needs
to be registered once the donor has lost their mental capacity. The
Enduring Power of Attorney should be registered with the Office of the Public
Guardian (the details are shown below). It is important to
follow the required procedures so it is advisable to see a solicitor or
get advice from the Office of the Public Guardian at this point.
Remember, if an individual has lost their mental capacity and has
not established an Enduring Power of Attorney then specialist
assistance will definitely be required and an application made to the
Court of Protection.
Once in effect, an Enduring Power of Attorney cannot
easily be rescinded. However, if ever there are real concerns that the
power of attorney is being abused then SIGNpost, your local Citizens
Advice Bureau or Office of the Public Guardian may be able to provide
advice on what to do.
There are different
regulations in Scotland that are governed by The Adults with Incapacity
(Scotland) Act 2000 which protects the rights and interests of adults
who are incapable of managing their own affairs. There are numerous
websites which provide information about this that can be found by
entering the title of the act (above) into a search engine. A good
source of information can be found at http://www.scotland.gov.uk/Topics/Justice/law/awi
Â (Additonally SIGNpost or organisations like your local Citizens Advice
Bureau can provide you with further information on Power of Attorneys
Office of the Public Guardian
PO Box 15118
E-mail:Â Â firstname.lastname@example.org
Website:Â Â http://www.publicguardian.gov.uk/
Telephone 0300 456 0300
Fax 0870 739 5780