An Enduring Power of Attorney ("EPA") is a legal document by which an individual ("the donor") appoints another person, or in respect of their property or financial affairs, a trustee corporation such as Perpetual Trust, ("the attorney") to act competently in the best interests of the donor. The primary purpose of an EPA is to ensure that, if the donor subsquently becomes unable to manage his or her own affairs, the chosen attorney has legal authority to act on behalf of the donor.
There are a number of options for and restrictions that can be placed on an attorney but, sadly, the reality is that the appointed attorney somtimes abuses their position, to the donor's detriment. Equally as sad is that often the abusing attorney is a family member or trusted friend.
In response to a Law Commission report entitled "Misuse of Enduring Powers of Attorney", which identified various types of abuse, the Government has enacted certain reforms to protect donors.
The amendments to the Protection of Personal and Property Rights Act 1988, which came into force on 26 September 2008, impose new requirements for making EPA's and increased accountability for attorneys. Important changes include:-
The witness to the donor's signing of an EPA must now be either a lawyer, a registered legal executive of at least 12 months experience employed by a laywer, or an authorised staff member of trustee corporations like Perpetual Trust.
Witnesses must go through a lengthy process of explaining the effects and implications of the EPA to the donor, including the donor's rights. In addition, they must complete a certificate that this has been done, that they have no reason to believe that the donor lacks mental capacity and that they are independent of the attorney.
The intention of the reforms is to protect the donors and place a greater degree of responsibility on attorneys to act accordingly. Inevitably, the cost of complying with the new laws will see an increased cost to clients but many feel that this is a small price to pay for providing increased protection to those who need it most.
If you signed an EPA before 26 September 2008, your EPA is still valid but many of the new provisions will apply to it.
There are two types of enduring power of attorney:
Read our frequently Asked questions For more information on Powers of Attorney.