Lasting Powers of Attorney and how has the law changed

This month sweeping legal changes were made to the way in which individuals are able to nominate people to manage their finances and make health and welfare decisions should they be incapable of doing so in the future.  The problem is that many people are not aware of the new system and how important it is.

Making a Lasting Power of Attorney is just as important as making sure your Will is in place – complete peace of mind that your affairs will be looked after if you are no longer able to manage them yourself.

LPAs were introduced on October 1, 2007, replacing the original Enduring Powers of Attorney. They allow you to take control of your future now by ensuring that someone is in place to look after your financial affairs should you be unable to look after them yourself. This includes such things as operating a bank account, making investment decisions, signing tax returns and buying and selling property.

However unlike EPAs, the new system, introduced by the Mental Capacity Act 2005 to prevent abuse of the vulnerable, has been extended to cover also welfare and healthcare decisions on your behalf but only when you lack the mental capacity to do so yourself.  This could also extend, if you wish, to giving or refusing consent to the continuation of life sustaining treatment.
This does not give your ‘attorney’ carte blanche over every facet of your affairs. The law states that they are obliged to act in your best interests at all times.

Any adult over the age of 18 can make an LPA at any time, but should obviously seek legal advice on how the document can be put in place and on the suitability of the proposed attorney. An LPA must be registered with the Office of the Public Guardian before it can be used and this can be done at any stage after it is drawn up. Registration takes six weeks which needs to be considered if a donor is likely to need assistance in the near future. It is this safeguarding procedure which makes the LPA system more complicated than the original EPA.

If you already have an EPA it is worth noting that since the change in the law, it is now no longer possible to create a new EPA or convert an existing one to an LPA. However any existing EPAs made before October 1 this year will remain legally valid and can still be registered at any time the ‘donor’ loses mental capacity.

The original EPAs were only designed to cover financial matters leaving your personal welfare unprotected in the event of your incapacity. The new LPAs were extended to plug this gap so they come in two forms one for financial affairs and one for health and welfare.

Any adult can choose to take one or both of these LPAs and certainly if you have an existing EPA it may be worth making a personal welfare LPA as well just for peace of mind.