On 1 October 2007 Enduring Powers of Attorney ( EPA) will be replaced by Lasting Power of Attorney (LPA), although EPAs created before the law change will remain effective.
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 an individual can appoint someone to deal with their finances for them by way of an Enduring Power of Attorney (EPA), but from 1 October 2007 this will change.
There will be two aspects to LPAs – finance and property (similar to the present EPAs) and health and personal welfare issues. Whether someone should make an EPA now, or an LPA after the October deadline, depends on whether their primary concern is with their financial affairs, or whether they are equally keen to appoint someone to have a degree of control over their healthcare.
If finances are a priority it is advisable to set up your EPA, as the new rules are complicated and could give rise to problems until any discrepancies are resolved. An EPA will be cheaper than an LPA and will involve far less bureaucracy.
Having an EPA or LPA is as important as making your Will. If an individual loses their mental capacity and does not have either in place, an application to the court will need to be made on their behalf – this is a long slow and expensive process and the person appointed has to comply with extensive court regulations.