If somebody loses mental capacity and can’t look after themselves, it will be necessary for someone else to step in. Either an Enduring Power of Attorney can be signed before the person loses mental capacity, or the situation will have to be dealt with by the Court. This document is an important means of providing peace of mind and, as such, should be given some thought as you get older.
ENDURING POWER OF ATTORNEY
An Enduring Power of Attorney (EPA) is a document signed by a Donor and authorising the person named (“the Attorney”) to take care of their personal care and/or financial needs. The EPA only comes into effect if and when the Donor is no longer able to look after the matters for themselves.
In order to set up an EPA, there are a number of matters to consider:-
Firstly, the Donor needs to decide who to name as their Attorney(s). A number of Attorneys can be appointed, and it is generally a good idea to nominate more than one so that in the event that one dies before the EPA is required there is another person who can deal with the matters named.
In the event that more than one Attorney is named, the Donor must decide whether they should be able to act jointly (ie they must all act together and cannot act separately), or jointly and severally (ie they can all act together but they can also act separately if they so wish).
An alternative Attorney can be named to cover the event that one or more of the appointed Attorneys cannot or will not act at the time. The EPA document can also name a person (known as a Third Party) who should be consulted by the Attorneys a someone who will have input into any decisions that are made. It is important to note, however, that their role is advisory only and the power to make the decision will ultimately rest with the Attorneys.
When nominating an Attorney, the Donor must have confidence and trust in the Attorney named as they will take over the running of very important aspects of life. The Donor should discuss all matters involved with the Attorneys so that they are aware of the responsibility that they would be taking on, and that they are happy that they will be confident and able to carry out the various tasks involved.
The Donor must appoint and these are people who will be served with formal notice of the fact that an EPA has been created. They will also be notified if the EPA is to be activated. A Notice Party should be the Donor’s wife, child, sibling, grandchild, nephew or niece. The Notice Parties must not be named as Attorneys.
Areas of care
The Donor can give the Attorney power to deal with any number of matters, including, but not limited to, their financial and property affairs, health, personal affairs or all of their affairs generally. They can give as much or as little power as they like and can state that certain Attorneys will have responsibility for certain areas where they might have particular competencies. For example, if one of the Attorneys has experience in running a business, they might be the appropriate person to look after the Donor’s business or financial affairs.
While the Donor can select certain areas where the Attorney will have power to act, they should also bear in mind that if the Attorneys are not able to act in some aspects then it would be necessary to make the Donor a Ward of Court so that the Courts can decide how to act. For example, if the Donor’s bank accounts are frozen when the EPA takes effect and the Attorneys do not have the power to activate them again, the Donor would need to be made a Ward of Court which would allow the Court to act.
The Donor should consider the following areas when deciding on the powers to afford the Attorneys:-
- Financial and other assets.
- Their business.
- Who they will live with.
- Their dress and diet.
- Who they will see.
- Review and care of any personal papers.
- Medical care.
- Other matters that are relevant to their way of life.
It is very important that the Donor takes enough time to consider these matters as they will obviously have a big impact on and influence their way of life.
When creating an EPA, it is necessary to obtain formal confirmation from a doctor that the Donor has the necessary mental capacity to complete the document and for this reason it is necessary to arrange for a GP to provide this information.
If the time comes for the EPA to take effect, an application must be made for it to be registered with the High Court and in those circumstances, the Notice Parties will be notified that the EPA is coming into effect. A GP would once again be required at that time to confirm that the Donor is no longer able to look after their own affairs and power need to be transferred to the Attorney.
A Donor can revoke the EPA at any time before it comes into effect. They can also object to it being activated if any attempt is made to register it with the High Court.
WARD OF COURT
If the person hasn’t made an EPA and they lose mental capacity, the only option left for their family is to make a Court application to have them made a Ward of Court. When this application has completed, any decisions regarding their finances or personal care must be approved by the Court.
Ward of Court applications can be quite lengthy and complex. The Court may decide to appoint a Committee of family members who will look after the Ward, but they are not allowed to act freely and ayny major decisions made must be approved by the Court. For example, if they decide to sell the Ward’s house or property, the Court must approve the sale and the sale price.
Making an EPA is always preferable to this route because it allows you to make some decisions about how you will live in the future and who you would like to look after you. Otherwise, a Court will be in control and the people making the decisions might be strangers to you, or people that you would never have chosen yourself.
Click HERE to download an information document that sets out a checklist for preparing an Enduring Power of Attorney.
If you have any questions or would like to discuss the creation of an Enduring Power of Attorney, fill out the form below and we’ll be in touch.