Enduring Power of Attorney

David Endicott

The good news is that we are all living longer.  The problem is that whilst our bodies may be geared up for this, on occasion our minds are not.  It is also a sad fact that the elderly are being targeted by the unscrupulous, and so it seems very sensible to think ahead.

There are many misconceptions about Power of Attorney; this article explains the Enduring Power of Attorney, its purpose and the benefits that can be derived from signing one.

What is a Power of Attorney?

A Power of Attorney is a legal document whereby one person (the Donor) gives another person (the Attorney) power to act on his behalf and in his name in respect of his financial affairs.  Before the Enduring Powers of Attorney Act 1985, every Power of Attorney was automatically revoked if the Donor became mentally incapable, which gave rise to two problems, firstly it was not always clear when a Donor actually became incapable, and secondly, it was not possible for a person to privately arrange in advance to give someone authority to handle his affairs when, at a later date, he had become incapable.  Thus, the only solution was an application to the Court of Protection for the appointment of a Receiver, a long winded, expensive and bureaucratic process.

What is an Enduring Power of Attorney?

An ordinary Power of Attorney becomes invalid if the Donor loses the mental capacity to manage his own affairs - just when the Power could be most needed!

By an Enduring Power of Attorney, the Donor appoints an Attorney who, if the Donor subsequently becomes mentally incapable of managing his own affairs, can continue to act as Attorney (subject to the power being registered with the Court of Protection). Once registered, the Attorney can continue to act on behalf of the Donor without interference from the Court.  The Power therefore "endures" or continues beyond mental incapacity. 

Why Do It?

• For peace of mind, knowing that you have chosen who is to deal with your financial affairs should you be unable to do so yourself (whether temporarily or permanently).
• To save money. A small initial outlay now can save time, trouble and expense, and avoid the cost of a Court of Protection Receivership in the event of mental incapacity.
• To simplify the administration of your affairs for your family and friends in the event of your mental incapacity. Your attorney will be able to deal with your affairs without the difficulties which will be encountered where there is no legal authority.
• To be prepared. No one can foresee the future; mental incapacity can occur unexpectedly e.g. following an accident or stroke. Illness may result in physical incapacity or hospitalisation. Bills still have to be paid, a business needs to be run, and arrangements may have to be made to sell a house and organise nursing or residential home care.

Decisions you need to make

• Decide whom you wish to appoint as your Attorney or Attorneys (e.g. spouse and/or children).  You may also, of course, appoint your solicitor, accountant or other adviser.
• Consider whether you wish to include any restriction on the Power e.g. limit the Power to particular property or to a particular aspect of your finances.  You may also include in the form a restriction that the power should not take effect unless you are or have become incapable of managing your affairs by reason of mental incapacity.

How to make an Enduring Power of Attorney

Please consult a Solicitor. An Enduring Power of Attorney is a legal document, which must be completed in a prescribed manner. There are circumstances where the power delegated is open to abuse. A solicitor will advise on the legal and practical implications of the document, and suggest safeguards for your protection.

David Endicott
November 2004