01 September, 2006
Many of us take it for granted that we are able to look after our own financial affairs, but have you thought about what would happen if you couldn't.
If you were to lose your mental capacity due to say an accident, illness or dementia, you may not be able to make your own financial decisions.
You can take steps now to choose someone you trust (the Attorney) to manage your financial affairs in the future, by making an Enduring Power of Attorney (EPA). An EPA is a powerful document and could allow the Attorney complete control of and unrestricted access to your finances and property. It is therefore important that specialist legal advice is taken to ensure that the EPA is tailored to suit your particular wishes.
The best time to make an EPA is while you are well enough to do so, so that it is available for use if and when needed in the future; if you lose your mental capacity to deal with your financial affairs it is too late to make an EPA. The only alternative then is for a "Receiver" to be appointed by the Court. Such an application can be time consuming and expensive.
In April 2007 the Mental Capacity Act 2005 comes into force which introduces significant changes to EPAs and Receiverships. Lasting Powers of Attorney (LPAs) will replace EPAs. EPAs are restricted to financial affairs only, however an LPA will also be able to cover health and welfare decisions.
It is likely that LPAs will be more expensive and the procedure will be more complicated and time consuming than with EPAs. It is therefore strongly recommended to consider making an EPA before April 2007, as it will still be valid after the new Act comes into force.