Enduring Power of Attorney Being Phased Out Last Month to Act |
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By: Adrian Tatum Posted: 2008-02-06 06:38:51 |
| In the UK the new mental capacity act is due to come into force on the first Monday in April 2007.The Act governs decision-making on behalf of adults who lack mental capacity, both where they lose capacity at some point in their lives, and where the incapacitating condition has been present since birth.This act covers all decisions, including personal welfare and financial matters, and covers decision-making on their behalf by attorneys, or court-appointed "deputies". It also clarifies the position if formal process has not been adopted.As things stand today you can draw up a basic Power of Attorney to have someone act for you and help with straightforward tasks such as fetching money from the bank. But it runs out once you become unable to manage your affairs. An Enduring Power of Attorney or EPA provides more facilities than a standard power of attorney. With an EPA you hand power over your property and money to someone else you trust. The power can start right now while you are well if you want it to, but the point is that it continues when you're unable to manage.The person to whom the arrangement applies is called the "donor" and once the donor becomes mentally incapable, the "attorney" he or she has appointed has to apply to the Court of Protection to have the EPA registered and pay a fee of £120.Existing arrangements will be allowed to continue, but from October 2007 anyone wanting to put control of their money and property into the hands of a trusted family member or friend will have to follow a new procedure.The EPA is to be replaced by a new Lasting Power of Attorney. A Lasting Power of Attorney (LPA) is a new statutory form of power of attorney created by the Mental Capacity Act.Anyone who has capacity to do so may choose a person (an "attorney") to take decisions on their behalf if they subsequently lose capacity. The LPA will replace the Enduring Power of Attorney (EPA) currently provided for by the Enduring Powers of Attorney Act 1985. Unlike an EPA, an LPA can extend to personal welfare matters as well as property and affairsBut the Lasting Power of Attorney will only be valid once it is registered with what's called the Office of the Public Guardian and a new fee paid to the Public Guardianship Office. The proposed new fee is £150 for each portion of the LPA, that is the financial portion and the welfare portion.Also, there will be added layer of security against any unscrupulous manipulation of the system to steal money or property. The new LPA cannot operate until it is registered. It cannot be registered without a signed certificate from a reputable person confirming that the donor is of sound mind. At the time of writing this article it is unclear as to the exact definition of a "reputable person", it maybe that you have to consult your family GP in order to obtain the certificate before the LPA can be drawn up.My advice is to seriously consider creating an EPA now you have less than 30 days before you will have top go down the LPA route. Which will be more time consuming and expensive than getting an EPA drawn up. The cost of drawing up and EPA could be as little as £70 and could save you a great deal of time and money in the future.Many companies like my own include an EPA as an integral part of the more complex inheritance tax saving wills, so you could even put you EPA in place a little or no cost.Collective Legal Solutions are specialist in Will Writing and Estate Planning, we can be found at http://www.gb-legal.com |
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