Why clients (or their close family) should take out an EPA before 1 October 2007.
The existing Enduring Power Of Attorney document is concise, straightforward to explain and at 4 pages is relatively inexpensive to prepare. Further should registration prove to be ultimately necessary with the Court of Protection, the fee required is £120.00. However, the regime in place after 1 October 2007 when only an LPA attorneyship will be available is far more onerous and expensive to prepare and to operate!
At present there is no requirement to actually register the attorneyship document, with the Court of Protection, unless mental capacity (or the onset of mental incapacity) of the donor is in question.
Furthermore, even though the attorney document has been executed by both donor and the attorney/s, it can be left in abeyance until such time as the donor regards him/herself as not being willing, or able, to look after personal financial matters. At that time the attorney document is then registered with those financial institutions where the donor has an interest: viz. banks, building societies, national savings, company registrars, life companies etc. As noted registration can take place, with the above institutions; there is no formal requirement to involve the Court of Protection unless mental incapacity is under consideration.
As EPA document executed, prior to 1 October 2007, will remain valid under the post (LPA) regime: this presents a window of opportunity to execute now an Enduring Power of Attorney.
Lasting Power of Attorney (LPA)
Apart from a general Power of Attorney (under the 1971 Powers of Attorney Act) a LPA will be the only prescribed form of attorneyship authorised after 30 September 2007. The prescribed form (now available) runs to 26 pages!
The LPA can be drafted to cover a donor’s health and personal welfare (which crucially can include medical treatment decisions). A second “limb” of an LPA will deal with property and financial affairs.
An LPA dealing with property and affairs (sometimes referred to as a financial LPA) may be used before and after the donor loses capacity.
Personal Welfare LPA which relate to health care decisions can only be used once the donor has lost capacity.
To be valid both forms of LPA must be set out in the ”prescribed form” and must be registered with the Office of the Public Guardian (OPG).
The statutory requirements of creating a valid LPA are exceedingly onerous and are outside the scope of these notes. The following serve merely to illustrate the “hurdles” which will be encountered!
First, under the Mental Capacity Act 2005 (MCA 2005) any LPA instrument must include the following:
· A statement by the donor (confirming informed consent).
· A statement by the donor indicating whether any party is to be notified on the registration of the LPA.
· A statement by the donee (confirming that he/she understand their duties and obligations as a donee).
· A certificate by a “prescribed person” (confirming no undue pressure or fraud involved in the decision to make a LPA and that the donor understands the scope and power of the LPA).
· The donee of the power is required to file a statement confirming that he has read (or has had read to him/her) the relevant information, or part of it, and that he understands the duties imposed on the donee of a LPA with particular reference to the MCA 2005 s.1 (the Principles) and s4 (Best Interests).
It will readily appreciated that conformity with the above last two mandatory requirements will have significant costs implications where law professionals are involved: to explain the principles involved and the best interest concept will take time.
Second, the requirement for the certificate of capacity to be signed by the “certificate provider”.
There are two categories:
· “A” an individual who has known the donor personally over the last two years.
· “B” certain Health Care professionals; registered social worker; law and financial professionals.
The Certificate Provider will have to address, and be satisfied thereto, as to seven key points of reference!
Certain individuals are specifically excluded to be a Certificate Provider:
- Members of the donor’s or attorney’s family;
- Any attorney, appointed by the donor, of an existing EPA or another LPA; and
- Any business partner or paid employee of the donor or attorney.
Comment on the role of the Certificate Provider:
The Certificate Provider must have the appropriate knowledge and understanding to give a certificate; this will mean knowledge or experience of issues relating to mental capacity and the effect of making an LPA including basic issues and the core principles of the MCA 2005.
Registration process
For LPAs registration with the Public Guardian office is mandatory. There will be a “prescribed period” of five weeks (beginning with the date notice is given) during which objections can be raised with the Public Guardian.
The registration fee will be £150.00.
Summary
We can only emphasise to clients the benefits of taking out NOW the existing EPA format - even though individual donors may regard themselves as fit and able to look after their immediate financial affairs.
In our view, spouses, civil partners, elder parents (with adult children), (unmarried) brothers/sisters who are of age (18 years) should all consider urgently the merits of taking out an EPA over the following weeks.
It is impossible to estimate the exact legal costs of preparing EPAs and LPAs but we estimate respectively figures in the region of £200/£250 and £750/£1000 plus VAT and disbursements.
There are just 12 weeks remaining to take out an EPA attorneyship before the deadline of 30 September 2007.
For further information please contact AndrewMurdoch, Associate Solicitor, or Sandra Wiltshire at Lockharts:
Andrew Murdoch Sandra Wiltshire
Tel: 020 7383 7111 Tel: 020 7383 7111
