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Prettys Solicitors Ipswich
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The problem with Enduring Powers of Attorney

March 2017

Paying bills, moving money between current and savings accounts, checking on how our investments are doing can all be time-consuming and complicated.  This can be even more so when many financial and other institutions now expect us to communicate with them online.  Remembering passwords and finding your way around a website can be a challenge at the best of times.  For those who were born before the IT age, or have failing mental faculties, it can be a serious problem.

The idea behind a financial power of attorney is that the donor (the person making the power of attorney) can pass some of that financial burden over to a trusted family member, a friend or a financial advisor.

The fact that you may be happy to hand over the day-to-day administration of your financial affairs does not always mean that you want to give up total control over your finances.  Most of us still like to be able to go to the bank and draw out money, either over the counter or by using a cashpoint. 

Although it may be said that a person has lost mental capacity, that is often a terrible over-generalisation.  Unless a person is unconscious, they will always have some level of mental capacity.  The fact that you cannot remember to pay your gas bill does not mean that you do not want to draw out cash so you can buy a newspaper or groceries etc.

Unfortunately, the Enduring Power of Attorney works on the basis that you either have mental capacity or you don’t.  Once the Enduring Power of Attorney has been registered with the Office of the Public Guardian and lodged with banks and other financial institutions, the donor finds that the bank and other parties it has been registered with will no longer be willing to deal with them directly.

It was in part because of the black and white approach which Enduring Powers of Attorney took that they were replaced in 2007 with the Lasting Power of Attorney.  This is a far more flexible document which acknowledges that mental capacity is a fluctuating state.  Under a Lasting Power of Attorney, the question of mental capacity does not need to be relevant and both attorney and donor can administer the donor’s finances.

If you have an Enduring Power of Attorney, you should give some thought as to whether it should be replaced with a Lasting Power of Attorney. 

 

For many of us in later life, the ability to still have some control over our finances and not be totally dependent upon others is extremely important.  It is also worth bearing in mind that the Enduring Power of Attorney does not cover healthcare.  As we are all living longer, having control over our healthcare in later life can be equally important.

There is no such thing as the reasonable patient; we all have different ideas on what is an acceptable quality of life.  If you wish to maintain control over your quality of life in later years, making a health and welfare power of attorney can be an extremely good idea.

For further information on this please contact Nigel George at Prettys. 

Nigel George has been a solicitor for many years and has a particular interest in mental capacity and mental health.

Nigel George TEP

Solicitor

e ngeorge@prettys.co.uk

t 01473 298342

 

 

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