Enduring Powers of Attorney
A power of attorney is a legal document under which a person (the "donor") gives another person (the "attorney") authority to act on the donor's behalf in relation to particular matters. One kind of power of attorney is an "enduring power of attorney" (sometimes, "EPA" for short).
The unique aspect of enduring powers of attorney is that they are not revoked by the mental incapacity of the donor. This means that an enduring power of attorney can be granted by a capable donor who wants to provide for their possible future loss of capacity. It avoids the need for the appointment of a receiver for a mentally incapable individual, and allows the donor to select the persons who will deal with their financial and property affairs.
If the donor does lose capacity, the attorney is obliged to register the enduring power of attorney with the court. Pending registration, it is limited in use to preserving the donor's assets. Once registered, the attorney can then continue to use the power.
An enduring power of attorney must be in a particular form, correctly signed, dated, and witnessed.
Whom should a donor select as their attorney? A suitable attorney might be the donor's spouse, adult child, or close friend. If the donor does not have an appropriate relative or close friend available to act, they can appoint a professional such as an accountant or advocate. Either way, attorneys must be carefully chosen: they need to be someone of good judgement, well organised, and entirely trustworthy: an attorney may have to make important financial decisions regarding the donor's assets, and the donor will be subject to the abilities and honesty of the attorney. In fact, it was partly because of significant degree of abuse of the authority given by enduring powers of attorney in England that "lasting powers of attorney" were introduced to replace enduring powers of attorney.
It is possible to appoint more than one attorney under an enduring power of attorney: up to four. A power of attorney granted to two or more persons can be "joint", or "joint and several": a joint power of attorney gives the attorneys authority to act jointly - where all of the named attorneys act. A joint and several power of attorney allows any one or more of the attorneys to act. Most people appointing two attorneys or more do so under a joint and several power.
The donor can restrict the powers given attorneys, and can impose conditions: for example, the attorney's power might be limited so as not extend to certain assets, or might only be allowed to become operative when the donor has lost mental capacity.
For the donor-attorney relationship to work it is important the attorney understands the donor, the decisions the donor would make and how the donor operate their finances. In essence, a donor needs to be able to trust their attorney with their money and lifestyle.
How we can help
Advocate John Rimmer can provide guidance on the creation, operation, termination, or registration of enduring powers of attorney. Please contact:
John Rimmer jr@advocatejr.com
Hollie Ranscombe hr@advocatejr.com
Ilsa Reeves ir@advocatejr.com
Tel: +44 (0)1624 621466 Address: Fort Anne, South Quay, Douglas, Isle of Man, IM1 5DP