Do You Need a Power of Attorney?
A power of attorney is a document which quite simply grants another person, of your choosing, the ability to 'stand in your shoes'. They will then be able to act on your behalf in relation to financial and property matters and also in matters of personal and medical care, subject to the powers you wish to give.
For many years it has been possible to make what is known as a 'general power of attorney', a document which is often drawn up on a temporary basis, to allow another to act for a person whilst they are, for example, abroad for some months, or otherwise indisposed.
Such a document is only effective for as long as the donor (the person making the power of attorney) wishes and can be revoked by them at any time. Likewise, if the donor loses mental capacity, the general power of attorney is automatically revoked. A general power of attorney would therefore be of no help to someone seeking to ensure their loved ones can make decisions on their behalf should they become mentally incapable of doing so themselves. To address this situation in 1985 the government introduced a legislation to enable individuals to put an 'Enduring Power of Attorney', or 'EPA' in place.
There were, however, problems with the EPA. No decision could be made under an EPA about personal care or health issues and in certain circumstances they could be open to abuse, as they could be used without registration.
On 1st October 2007 the government replaced EPAs with 'Lasting Powers of Attorney' (LPAs). If you already have an EPA made before the 1st October 2007 it is still valid, however, it is no longer possible to put a new one in place. Instead you would need to consider an LPA of which there are two types, one that enables you to appoint people to deal with your property and financial affairs and one that enables you to appoint people to deal with health and care decisions.
The new LPAs allow donors a greater deal of input into when and how the attorney(s) are to act, especially when comparing this to the older EPA or a general power of attorney. More than one attorney can be appointed, and there is a choice of how the attorneys can act – together at all times; independently of each other; or a mixture of both. As a donor you can also choose replacement attorneys, if your first attorneys die or become unable to act. There is also provision for you to specify areas in which you do not wish your attorneys to act, with whom you wish your attorney(s) to consult when making decisions and you can even add safeguards and reporting requirements
Making an LPA is strongly encouraged and not just for the elderly. Unfortunately the sad facts of life dictate that no-one knows whether they might suffer an accident causing them to lose their mental capacity, and without a LPA (or an EPA, if you already have one) an application would have to be made to the Court of Protection to appoint one or more individuals power over your assets, something which is often very costly, time consuming and, maybe most importantly, you would no longer have a say in who the person appointed should or could be.