People are now living longer, and it is increasingly common for an individual to be unable to manage their affairs for a number of reasons.
If the situation arises where decisions need to be made and people need to speak on your behalf about your property, financial affairs and health and welfare, are you ready?
For many years Enduring Powers of Attorney (EPA) covered situations when this happened in relation to property and financial affairs.
Up until 2007, an EPA gave power to your attorneys to deal with your property and financial affairs only, but from September 2007 the Government introduced two Lasting Powers of Attorney (LPA) - one for property and financial affairs and one for health and welfare.
Breda Cashell, director in the private client team at Wake Smith, said: “An EPA made prior to September 2007 is still valid in relation to property and financial affairs only and requires registration if the donor loses mental capacity, this can take up to two months.
“The new LPAs are far more comprehensive and have more safeguards built in to protect you.
“The benefit of having the LPAs is that if you register them when you are still of sound mind, they are ready to use straight away if you lose capacity.
“They do not have to be registered with the Office of the Public Guardian immediately, but we recommend clients do so, as registration takes about two months.
“The disadvantage of an EPA now is that if you lose capacity, and something needs to happen quickly, you have to register it before it can be used by your attorneys. This can take up to two months which can be very inconvenient and stressful for those involved, for example if a house sale is imminent or care fees need paying, it just delays the process.
“In the last 10 years, financial institutions, hospitals, GPs, local authorities, utility companies, health care providers and care homes are more aware of an individual’s rights and new data protection legislation makes if even more important that they liaise with the correct person.
“These organisations are now asking to see powers of attorney to comply with this legislation to prevent them disclosing information to the wrong person.
“There is more emphasis now on having LPAs and many institutions will not talk to family and close friends without one.
“My advice is if you want to provide for the possibility of losing capacity or simply being unable to manage your affairs for any reason, you should make the new LPA.
“This covers you should something need to happen quickly, in relation to property and financial affairs and you have got the addition of having the health and welfare side covered, if you do lose capacity.
To recap:
- Many people have made an EPA in the past. The cost of registering an EPA once capacity is lost is similar to making two LPAs (property and financial affairs and personal welfare) and registering them.
- With an EPA you are fine as long as you have mental capacity, it needs registering if you haven’t, this process can take approximately two months.
- With an LPA you may register them immediately and then if anything happens they may be used straight away, whether you have mental capacity or not.
- Wake Smith’s advice is to replace an existing EPA with the new LPAs so your attorneys may act for you immediately, if you lose capacity.
For further information please contact Breda Cashell at [email protected] or on 0114 266 6660.
