None of us like to think of the possibility as we grow older of getting too ill, either mentally or physically, to manage our property and finances ourselves.
We can all easily assume that, somehow, we will be able to manage our affairs throughout our lives – that we will always, for example, be physically capable of getting to the bank or post office to withdraw money or pay bills, or that we will always be mentally capable of understanding and signing documents connected to our property.
Whilst many of us will throughout life be able to look after our affairs as independently as ever, the sad truth of the matter is that for others, the ability to be physically or mentally capable of managing property or finances can be unexpectedly lost through accident, injury or the onset of illness such as dementia.
It is therefore reassuring to know that there are things that you can do to help you plan for the future should the worst happen. You can plan for these possibilities by taking sensible precautions whilst you are mentally and physically capable of doing so. How? By executing a document known as an Enduring Power of Attorney (EPA)
So, what exactly is an Enduring Power of Attorney?
An Enduring Power of Attorney is a Deed by which you can give authority to another person (your “Attorney”) to act on your behalf in relation to all or specified property and financial matters.
An EPA is not a Will. A Will is only relevant after your death. An Enduring Power of Attorney deals with the management of your property and finances when you are alive, but unwell.
Do I lose control when I sign an EPA?
By executing an EPA, you are potentially sharing control of your property and finances with your Attorney.
You can however state that the EPA is not to come into operation unless you become mentally incapable. Some people prefer to keep the EPA restricted in this way. Other people choose not to, as they wish their EPA to be effective if they remain mentally capable but become physically incapacitated and unable to manage their banking etc. This is an important choice which should be carefully considered before executing an EPA.
Who should I appoint as my Attorney?
You can technically appoint anyone to be your Attorney however it is important that you ensure that you appoint someone that you trust completely, whether a family member, friend or professional advisor. An EPA gives your Attorney complete control of your property and finances (unless restricted) and so you must be confident that your Attorney will have your best interests at heart.
It is also important that you discuss your intentions with any Attorney you intend to appoint as an Attorney must accept such an appointment, and sign the EPA form after you.
Can I have I have more than one Attorney?
Yes, indeed it is often practical to have more than one Attorney. If you choose to appoint more than one Attorney, you must decide whether they can act independently of each other or whether they must always act together. This choice is not entirely straightforward you may need legal advice to guide you in this regard.
What Powers would my Attorney(s) have?
Subject to the terms of the particular EPA, an Attorney has wide authority to stand in the Donor’s shoes and make all decisions about your property, income and finances, which you could have made, with a few exceptions.
An Attorney cannot do the following:-
- Make a Will for you
- Sign an affidavit
- Perform any act which you were authorized to do because of personal appointment, personal skill or a statutory direction.
- Make medical or personal welfare decisions for you.
I don’t have assets or property of my own – is there any point in signing an EPA?
Regardless of whether you own property or have assets, someone will need to manage your pension or benefits if you cannot do so yourself. This will be made much easier with an EPA in place.
All of my assets are jointly owned with my spouse/partner – would I still need an EPA?
If it became necessary for your jointly owned house to be sold and you were not mentally capable of signing the deeds yourself, only a person with authority (such as an Attorney) can sign on your behalf. One joint owner cannot sign deeds for all co-owners.
Often, joint bank accounts are frozen if a bank becomes concerned that one party is no longer capable and there is no EPA is in place. This can cause cash flow problems for all of the account holders. This can be avoided with an EPA.
What responsibilities would my Attorney have?
At all times, your Attorney must act in your best interests. Your Attorney must apply to register the EPA with the High Court if you have become or you are becoming mentally incapable of managing your financial affairs. During the registration process, the authority given to your Attorney is effectively “on hold” until the process has been completed and the original Deed is issued bearing the court registration stamp.
Your Attorney is obliged to give you formal notice if steps are being taken to register your EPA. As an added protection, your Attorney is also obliged to give notice to a number of your next of kin. You, or family members notified can lodge an objection with the High Court, if you or they consider the registration of the EPA to be inappropriate.
Can I change my mind and revoke an EPA?
Yes, you can revoke an EPA while you remain mentally capable, and your EPA has not been used. You should give notice of revocation to your Attorney. However, once an EPA has been registered, it can only be revoked by the High Court.
If I recover my capacity, who is in charge of my affairs then?
There is a procedure to de-register an EPA which would allow you to resume control of your affairs yourself. It would be important to seek legal advice to guide you on this process.
Is it expensive to make an EPA?
No. Legal costs are modest as the paperwork is not complicated once the important decisions have been made with professional help. In fact, it would be much more expensive NOT to have an EPA should you have the misfortune to lose your capacity.