Client Guide: Enduring Powers of Attorney
What is a power of attorney?
A power of attorney is a document whereby an individual known as the donor appoints someone, known as the attorney, to deal with his or her affairs. An ordinary power of attorney can no longer be used if the donor later becomes mentally incapable of managing his or her affairs.
What is an enduring power of attorney?
An enduring power of attorney (EPA) is a power of attorney that, subject to certain conditions and safeguards, continues in force even after the donor becomes mentally incapable of handling his or her affairs.
Does the enduring power of attorney have to be used straight away?
No – some EPAs are never used because it never becomes necessary. The EPA document may contain a direction that it will not come into effect until, for example, the donor requests it or becomes mentally incapable. If there is no restriction of this type the EPA is legally effective at once, although it may be kept in reserve until needed.
What powers may be given to attorneys in the enduring power of attorney?
This depends on what the particular EPA says. The attorney may be given wide powers to deal with all the donor’s property and affairs or the power may be limited to certain particular tasks. It is up to the Donor to decide what the attorney should be able to do.
What action can the attorney(s) take on behalf of the donor?
An attorney under an EPA has no power over the “person” of the donor and so has no power to say, for example, where he or she lives. The attorney has control only over the donor’s assets and affairs. Generally an attorney can do anything which the donor could have done provided there is no restriction in the EPA document.
Can an attorney make gifts on behalf of the donor?
On the whole, this is not possible, except for modest gifts for birthdays, Christmas or anniversaries, and then only in proportion to the value of the donor’s assets. Any larger gifts could only be made following a formal application to the Court of Protection. An attorney cannot make a Will for the donor without an application to the Court of Protection and, usually, a court hearing.
How is the enduring power of attorney used?
If the EPA does have to be used then generally speaking a copy of the document, certified on each page by a solicitor, should be shown to the donor’s bank and to any other organisation that needs to know that an attorney is acting on behalf of the donor. The attorney can then sign cheques, forms and other documents on behalf of the donor.
How does the attorney sign documents?
There is no set rule, but “John Smith as Attorney for Freda Jones” or “Freda Jones by her Attorney John Smith” are both common.
What if the donor later becomes mentally incapable of managing his or her affairs?
The EPA must be registered with the Office of the Public Guardian. Briefly, a notice of the application by the attorney(s) must be given to the donor and to certain of his or her closest relatives. Objections can be made to the registration if, for example, one of the relatives thinks an attorney is unsuitable or that the application is premature. There is a 35-day period in which objections can be made before registration is effected.
How does the attorney know when to register?
It is a matter for his or her judgement. If the attorney thinks the donor “is or is becoming” mentally incapable of managing his or her property and affairs the EPA must be registered. It would probably be sensible to talk to the donor’s doctor but the attorney is not obliged to do so.
What is the effect of registration?
Until registration the donor continues to have power to deal with his or her own affairs. This stops on registration. The donor also can no longer cancel (revoke) the EPA after registration. If the attorney has been using the EPA previously most of the powers are suspended during the period between the date when the application to register is made and the date when the Public Guardian registers the EPA. However, essential matters like payment of care fees can be dealt with in the interim period. If the attorney believes the donor has become, or is becoming, incapable, registration sooner rather than later is advisable, particularly if there are significant matters to be dealt with such as the sale of the donor’s house to pay for nursing home fees.
What happens after registration?
The attorney should produce a copy of the EPA (now including the impress of the Office of the Public Guardian) certified on each page by a solicitor, to the bank, and others who need to know about it. If a copy has already been produced before registration a copy of the registered EPA should now be produced. This is particularly important if it is a concern that the donor may try to draw money. Production of the registered EPA tells the body concerned that it is no longer appropriate to rely on the donor’s own signature. Otherwise the attorney(s) continue to manage the donor’s affairs as before.
Does the attorney(s) have to keep accounts?
Generally speaking, no, if the power is not registered, although it is good practice to do so and to keep accurate records of all transactions and correspondence. However, if the power has been registered, then the attorney has a duty to keep accounts and the Court or the Office of the Public Guardian can call on the attorney to provide these at any time.
What happens when the donor dies?
The EPA has no force once the donor dies and his or her Will, if there is one, takes effect. If the EPA has been registered, the Office of the Public Guardian must be told about the death.