Date:  14 January 2009

LASTING POWERS OF ATTORNEY – THE REASONS FOR

I think it is fair to say that the legal profession and its clients were generally happy with the provisions regarding the old Enduring Powers of Attorney.  They were a useful practical tool to help families when the older generation were reaching that time of life when they may no longer be capable of looking after their own affairs.  Accordingly, there was disquiet when it became known that Enduring Powers of Attorney were to be abolished at the end of September 2007 and that their replacement, Lasting Powers of Attorney, would necessitate the completion of a significantly larger document, together with the overt emphasis on what needed to be discussed in detail with the donor (that is the person making the power).  Additionally, it was perceived that prospective attorneys might feel that the duties to which they would be subjected would be more onerous than had been the case with Enduring Powers of Attorney.

It is understood that it had been perceived that there was abuse of the system of Enduring Powers of Attorney and maybe that was the case.  From my perspective, I have to admit that being primarily involved in the creation of the power and having little involvement in how the power is subsequently administered, I have to acknowledge a certain degree of ignorance as to what may have happened in their exercise.  I nevertheless hold to the belief that abuse was an exception and that the vast majority of powers were exercised responsibly. 

Be that as it may, after a flurry of creating a considerable number of Enduring Powers of Attorney in the last days of September 2007, there has, as anticipated, been a comparatively small take up of Lasting Powers of Attorney.  Most clients for whom I have made Lasting Powers have been aware of the change last year and acknowledged that they wished they had made Enduring Powers when it was possible to do so.  There has been a significant increase in the costs involved in preparing Lasting Powers of Attorney to reflect the additional time spent on preparing the document and to reflect the additional responsibility taken on by solicitors who would normally be the formal “certificate provider”.  The certificate provider has to sign the power of attorney confirming that the donor is quite comfortable with the creation of the document.

It is now possible to create Personal Welfare Powers of Attorney which enable attorneys to make decisions about such things as medical treatment.  There was no comparable provision in the Enduring Powers of Attorney regime, so this is a useful additional tool.

Having made negative comments regarding Lasting Powers of Attorney, it must however still be recognised that they are most certainly preferable to the alternative of appointing a deputy (formerly a receiver) through the Court of Protection should the need arise.  It has to be acknowledged that many Enduring and Lasting Powers of Attorney may never be required for the main purpose for which they were created, that is to enable the attorney to handle the affairs of a donor who has lost mental capacity.  If a donor dies without ever losing the capacity to handle his or her own affairs, then it may be that the creation of the power of attorney had been an unnecessary expense.  I do not have access to any statistics to show what proportion of powers of attorney do in fact prove to be necessary, nor am I aware of any such statistics being available.  In view of the additional costs of Lasting Powers of Attorney, I am sure that there is now a temptation to cross one’s fingers and hope for the best.  Nevertheless, whilst there may no longer be the necessity for comparatively youthful persons to make Lasting Powers of Attorney to plan ahead (as was happening with Enduring Powers of Attorney), it is still advisable for more elderly persons at least to consider whether or not the time has arrived to make a Lasting Power of Attorney.

The alternative, the appointment of a deputy, can make the cost of creating a Lasting Power of Attorney appear to be a significantly better bargain.  In order to have a deputy appointed, an application has to be made to the Court of Protection.  There is a fee of £400 payable (although that can be waived in whole or in part in the case of applicants whose income is below a certain level), compared to the Public Guardianship Office fee of £150 for registering a Lasting Power of Attorney.  The applicant has to provide extensive information regarding the person in respect of whom the application is to be made, including details of their housing, the people who visit the respondent, details of any social worker or care manager or GP for that person, his or her income, pensions, savings, properties and any other assets belonging to that person.  The proposed deputy also has to provide certain financial information about himself.  Additionally, the respondent’s general practitioner has to complete a form providing requisite details in support of the application, and in all probability the GP will also be entitled to charge a fee for doing so.

Having lodged the application, and paid the fee where necessary, there is also the possibility of an attendance at Court being required – and of course there is no guarantee that an appropriate Order will be made.  This leaves the applicant at risk of having incurred significant costs without having anything to show for it.

The deputy will also have to prepare regular accounts detailing the handling of the respondent’s financial affairs.  Whilst an attorney would of course have to act entirely properly and above aboard in handling the donor’s financial assets, there is not the same formality required in the keeping of accounts.

In the days of Enduring Powers of Attorney, the alternative to not having made a power before the donor lost mental capacity was the appointment of a receiver, and the choice between the two courses of action was more significant, but even now, the creation of a Lasting Power of Attorney must in suitable circumstances be much preferable to having to apply for an appointment of a deputy.

Roger Williams