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Lasting Powers of Attorney: The New Regime Under the Mental Capacity Act 2005

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If you were suddenly unable to deal with your financial and or personal affairs due to an illness or accident, who would you want to act on your behalf?

You may have heard the terms Power of Attorney or Enduring Power of Attorney (“EPA”). The Mental Capacity Act 2005 abolished EPA’s with effect from 1 October 2007 and replaced them with Lasting Powers of Attorney (“LPA”). If you or a family member made an EPA before October, they are still valid and can still be used but it is advisable for people to seek advice to determine whether their existing EPA is sufficient or whether a new LPA would be more appropriate to protect their interests in the event that they are unable to deal with their own affairs.

An LPA allows you (the donor) to choose your Attorneys and gives them your authority to deal with your affairs if you become incapacitated. An important issue is that LPA’s can only be made while the donor has legal capacity to execute the document. Therefore, early advice should be sought to ensure that the LPA is made prior to any loss of capacity. If you become incapacitated without and EPA or LPA the process of someone obtaining authority to deal with your affairs becomes more complicated, lengthy and expensive. You will also have lost the ability to choose who that person would be if you become mentally incapable of making a power of attorney.

An LPA now comes in two parts; Financial and Property Affairs (very similar to the old EPA’s) and Personal Welfare which covers matters such as housing and healthcare.

The new LPA’s are of particular importance for elderly members of the community. An LPA can be used by an adult child to make decisions about living arrangements and healthcare for an elderly parent with a condition such as Alzheimer’s.  Those with a serious illness should consider executing a LPA to ensure that decisions can me made on their behalf about personal and welfare matters if the illness deteriorates to such an extent that the person is unable to make their own decisions.  The LPA will also extend to events such as serious accidents where the donor is suddenly and unexpectedly unable to make decisions.

The legislation implements important safeguards to ensure that a LPA cannot be abused. Unlike an EPA, the LPA is of no effect until it is registered with the Public Guardian.  The document creating the LPA will specify who should be notified on an application for registration. The LPA must also contain a certificate from a prescribed person stating that the donor understands the document and that the donor did not make the LPA as a result of fraud or undue pressure.  Persons who are able to sign a certificate include a person known to the donor for at least two years or a professional person such as a medical practitioner or a solicitor.

For peace of mind that your affairs will be looked after by the person(s) you trust you should consider making an LPA now.

For more information please contact a member of our Wills and probate team, Sangeet Tatem and Kevin Sandall at Romford, Roger Philpot at Collier Row or Jodi Hamlin at Gidea Park.

Tel  01708 745183

Email Romford@fbarnes.co.uk

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