What is an Enduring Power of Attorney?March 31, 2016
The benefits of drawing up a will are widely recognised as in doing so you make provision for the winding up of your affairs after death. There are also opportunities available to make provision in advance for the management your own financial affairs should you become mentally incapable of managing them yourself during your lifetime. This becomes increasingly important given that the incidence of dementia is on the increase, and other issues such as accident or injury can result in a loss of capacity.
By making an Enduring Power of Attorney (EPA) you can appoint one or more people to act on your behalf in relation to all of your financial affairs in the event that you are unable to do so yourself in the future. The EPA can include restrictions if you wish, but generally it is advisable to ensure that the attorneys can deal with all of your assets if they need to, including giving them the power to sell your home. The attorneys would be able to manage your assets and income, and deal with any expenses that you have, such as nursing care fees. An EPA should be viewed as being like an insurance policy, in that it is hoped that it will never be needed but would nevertheless be available should the worst happen. It is important to make an EPA when you are still healthy and capable, rather than waiting until capacity has become an issue.
To become effective, the EPA will need to be registered with the High Court but registration is not required until your attorney believes that you are no longer capable of managing your own affairs. As a safeguard, notice must be served on you and your next of kin prior to your EPA being registered. Should you, or your next of kin, feel that you are still capable of managing your own affairs you may object to registration at that time.
It is also worth taking into consideration that creating an EPA is relatively inexpensive. Should you lose capacity without having made an EPA then your next of kin or carer may need to make an application to the High Court to be appointed as a ‘Controller’ instead. As with all court applications, this is a more expensive procedure which is best avoided. Controllers are subject to the continuing scrutiny of the court and must submit annual accounts for approval together with payment of an annual court fee. In practice, neither of these obligations apply to attorneys acting under an EPA.
In England & Wales, EPAs have been replaced with ‘Lasting Powers of Attorney’ (LPAs) which enable people to appoint attorneys both in relation to their financial affairs and ‘health and welfare’ issues such as consent to or refusal of medical treatment. At present there is no equivalent arrangement under Northern Irish law, however a new Mental Capacity Bill is currently being debated in Stormont and it is anticipated that this will introduce LPAs to Northern Ireland. It is hoped that the legislation will be enacted later this year. It remains unclear as to whether the new legislation will replace EPAs with LPAs entirely; however those who work in this area hope that the current EPAs will remain available. As LPAs are considerably more expensive than EPAs, and in light of the uncertainty regarding the future of EPAs, there is a strong argument for signing an EPA while they remain available. Any EPAs already in place when the law changes will remain valid.
An article of this kind can never provide a complete guide to the law in these areas which may be subject to change from time to time. The opinions and suggestions made within this article should not be interpreted as specific advice in relation to any particular individual or individuals. Cleaver Fulton Rankin does not accept responsibility for any loss occasioned by someone acting or refraining to act on the basis of the opinions and suggestions contained in this article.