ELDERLY CLIENT ISSUES

Answers to some frequently asked questions.

Enduring Powers of Attorney
If someone has made an ordinary power of attorney, it ceases to be valid when the person creating it loses the mental capacity to manage his or her affairs. This brief outline does not apply to ordinary powers of attorney but only to the special type called enduring powers of attorney. They are governed by the Enduring Powers of Attorney Act 1985, and the rules made under it.

Q. What is an enduring power of attorney?
A. An enduring power of attorney is a power of attorney which, subject to conditions and safeguards, continues in force even after the maker of the power (called the donor) becomes mentally incapable of handling his or her affairs, provided that it is REGISTERED (see below). The donor may, however, revoke an Enduring Power of Attorney at any time before it is registered.

Q. When can such a power be made?
A. The power must be made before the donor becomes mentally incapacitated. A person may, however, validly create an enduring power of attorney even if he or she is already incapable of managing his or her property and affairs: it is necessary only that the donor understands the nature and effect of the power when it is created.

If there is any doubt as to the donor's mental capacity at the time the power is made, the advice of a doctor should be obtained.

Q. What form must the power take?
A. An enduring power of attorney must be in the exact form prescribed by the Enduring Powers of Attorney (Prescribed Form) Regulations 1990.

The form must be completed by the donor and the person who has agreed to act on behalf of the donor (called the attorney). In fact, more than one person may be named as attorney: in that case, the attorneys can be empowered to act either jointly or jointly and severally.

It is also possible for a donor to execute more than one Enduring Power of Attorney in favour of different attorneys.

The Enduring Power of Attorney form must be completed strictly in the manner prescribed by the regulations.

Q. What authority does the power give?
A. A donor of an enduring power of attorney will usually give general authority, "to act on my behalf in relation to all my property and affairs". This means an attorney can have immediate access to a donor's finances: an attorney's powers are coterminous with a donor's.

The donor may however restrict the attorney's authority if this is thought appropriate.

Be aware that there are risks as well as benefits in granting a power of attorney: no security is given for attorneys' actions; attorneys are not accountable, and attorneys might always abuse their authority.

The choice of attorney is therefore a crucial one: the attorney needs to be a trustworthy person of proven financial competence - all the more so if the donor's asset position is complex or extensive.

A donor may wish to give the attorney a letter, outlining e.g. the donor's approach to tax planning; the charities the donor supports; the sort of nursing home in which the donor would prefer to reside should the need arise, and where the donor's will and deeds are stored. A donor may also wish to authorise disclosure of the will and medical records in case of need; and to explain in writing why the particular attorney has been chosen, rather than someone else.

Q. What happens when the donor becomes mentally incapacitated?
A. When the attorney believes that the donor is or is becoming mentally incapable, the attorney must apply to register the enduring power of attorney with the Court of Protection before he or she can act or continue to act under it. The obligation to register arises immediately upon the power being signed if the donor is already then incapable of managing his or her affairs.

Once a person has become mentally incapable and before the power has been registered, the attorney's authority to deal with the donor's property and affairs is very limited. It is in the interests of the donor and the attorney to proceed with registration as quickly as possible after the donor has become mentally incapable.

Q. What has to be done to register an enduring power of attorney?
A. The attorney must give notice in a prescribed form to the donor and at least three near relatives of the donor.

Q. Can they be any relatives?
A. No - they must be taken in order of priority, class by class, as set out in the Act.

Notice need not be given to a person otherwise entitled to receive notice if his or her name or address is not known to the attorney and cannot be reasonably ascertained or the attorney has reason to believe that such person has not attained the age of 18 years or is mentally incapable. If there is more than one person in a particular class of relatives entitled to receive notice then all persons in that class must be given notice.

Q. After the attorney has served all the forms, what happens next?
A. The application on another prescribed form should be sent to the Public Trust Office, to arrive within ten days of the last form being served. A fee (currently £220) and the original power of attorney should also be sent.

Q. Will the enduring power of attorney be registered immediately?
A. No - the papers will be checked to see that everything is in order and held for 35 days from the date of the last form, in case there are any objections.

Q. Can I deal with all this myself?
A. Yes, there is no reason why not. The forms are available from law stationers. Nevertheless we should warn that there are a number of traps for the unwary: you could find yourself having to see a solicitor in the end. You may prefer to ask us to prepare the correct forms for you, to meet your precise requirements.