An Enduring Power of Attorney (EPA) is a document created under the Enduring Powers of Attorney Act 1985 where the Donor gave the Attorney legal authority to act on their behalf. The authorisation extended to legal and financial decision making and importantly would continue to remain effective even if the Donor lost mental capacity.
Within a few years of its introduction however, it became apparent that provision for those who have lost mental capacity was inadequate, with a recommendation that they be abolished. There remained a gap as an Attorney could not deal with health and welfare issues nor could an EPA cater for a Donor who had fluctuating capacity.
The Law Commission’s proposals for reform were ultimately enacted in the Mental Capacity Act 2005 and the Lasting Power of Attorney (LPA) was born that we see in circulation today.
Essentially, after 1 October 2007 no new EPA’s could be drawn up, but any that pre-date this remain in force, and should the Donor start to lose capacity they can be registered with the Office of the Public Guardian. Unlike the LPA, an EPA can be used without registration provided the Donor has mental capacity.
So, to the LPA, how and why should they be considered?
Their purpose is to meet the needs of every individual, whether a retired civil servant, business owner or widow. They are designed to provide for the day, if and when the Donor feels or is no longer able to look after their own personal, financial or business affairs. It enables the Donor to designate tasks to certain family members or business partners to reflect the simplicity or complexity of the Donor’s everyday life.
By way of example, I am happy to report that the statistics indicate the incidences of strokes are falling due to increased awareness of lifestyle factors and medical advances but, there are still around 100,000 strokes in the UK each year; which is around 1 every 5 minutes.
Who will be able to access your bank accounts, ISA’s, property or investments if you become one of these statistics? How are your savings structured in the event that your relatives receive a bill for long term care? Who will have authority to decide your long-term care, rehabilitation or even end of life care? Who will be able to continue the implementation of your 12-month business growth plans whilst you take extended leave for health reasons?
While a family member maybe the right person to deal with your personal affairs, your business may require individuals with more experience and expertise depending on the business structure including governance requirements. A Business Lasting Power of Attorney (BLPA) can provide you with separate security.
It is my view that LPA’s and BLPA’s are not a luxury and along with a current and up to date Will they are an essential planning tool. I am sure anyone would agree who finds themselves in the unenviable position of being hamstrung by red tape when all they want to do is care for a spouse, sibling, parent or partner.
I don’t think you want to become either of the above statistics. At Bell Howley, we can provide essential advice to alleviate the worries or uncertainties created by failing to have in place documents that provide you with this surety.
Article by Amanda Perrotton