At present provision can be made for serious illness, accident and old age by setting up an Enduring Power of Attorney. This gives someone else authority to deal with your financial affairs. But from April 2007 the law is changing. A new form of Lasting Power of Attorney will be introduced. The new procedure is likely to be both more complicated and more expensive. Existing Enduring Powers will continue to be effective but no new ones can be signed after the changes take effect in April

Margaret Banks, a Wills and Probate specialist at Harding Evans Solicitors, answers some common questions.

 

1. What is an Enduring Power of Attorney?

A document which appoints one or more attorneys to sign on your behalf for your money and property.

2. Who can be an attorney?

Any adult member of your family, a friend or a professional person such as your accountant, financial adviser or solicitor can be appointed your attorney. The essential thing is that you trust your attorney to deal with your money and property on your behalf.

3. Can I have more than one attorney?

Yes, you can appoint joint attorneys or appoint them to act jointly and severally. This means that one of them can act alone, but the other would be there in case the first attorney was unable to act. Many people appoint their spouse and one of their adult children, jointly and severally.


4. What can an attorney do under an Enduring Power?

The attorney can sign on your behalf to deal with all your cash and investments and your house. The attorney can also sign to apply for State benefits on your behalf, or to deal with your income tax. But the Power is purely financial. The attorney has no authority to make decisions about your welfare or medical treatment.


5. When would the Enduring Power be used?

The most common need is where an elderly person is suffering from a stroke, or dementia, but a Power can be of help when someone of any age suffers physical or mental illness, or serious accident.

If you have physical difficulties with getting to the Bank, signing etc, then the Power can be used by your attorney to help you, without registration. If you become mentally incapable of managing your affairs, then the Power would need to be registered with the Court. Notice is given to close family, and there is a fee to be paid to the Court.

If you become mentally incapable but have no Power in place, then a member of your family would probably have to apply to the Court for a Receiver to be appointed. This is a lengthy and expensive procedure.

6. What happens after April 2007?

If you already have an Enduring Power of Attorney, then the attorney will be able to deal with your money and property, as now. But from April 2007 any new powers will be Lasting Powers of Attorney. The government has not yet published the final regulations but it is already clear that these Powers will be more complicated to set up and will have to be registered with the Court before they can be used at all, even if you still mentally capable. They will be able to cover health and welfare, as well as financial decisions.


In summary, the simplest and cheapest way to provide for the difficulties of illness, accident and old age will continue until April 2007 to be the putting in place of an Enduring Power of Attorney. The new form of Lasting Power seems inevitably to mean more Court intervention and increased cost.