Whilst most people know that they should make a Will, fewer people are aware that they need to consider what might happen if they are no longer able to manage their affairs (whether this be due to a long period of absence abroad or to physical or mental incapacity). At the moment you can appoint someone to deal with your finances for you by way of an Enduring Power of Attorney (EPA). This is to be replaced by Lasting Powers of Attorney (LPA) on 1st October 2007 although EPAs created before that date will remain effective.
There will be two aspects to LPAs – finance and property (similar to the present EPAs) and health and personal welfare issues. If finances are your priority, the sooner you set up your EPA the better – the new rules are complicated and could give rise to problems until any discrepancies have been resolved so an EPA will be cheaper than an LPA and will involve far less bureaucracy. If, however, you would prefer a document that extends to medical and healthcare decisions, you may prefer to wait until October and make an LPA. Alternatively you could make an EPA now to deal with your property and finances and, subsequently, an LPA limited to dealing with your health and personal welfare.
It is important however that you consider making one or the other. Having an EPA or LPA is as important as making your Will. If you lose your mental capacity and do not have either in place, an application to the court will need to be made on your behalf – This is a long slow and expensive process. The person appointed has to comply with extensive court regulations and, more importantly they may not be the person of your choice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.