Enduring Powers of Attorney: The law Society's Guidelines for Solicitors

In summer 1996, the Law Society published guidelines to assist solicitors in advising clients who wish to draw up an Enduring Power of Attorney (EPA). The guidelines were prepared by the Society's Mental Health and Disability Sub-Committee in response to a number of ethical and practical questions which are often raised by practitioners with the Society's Professional Ethics Division or Practice Advice Service. Details of how to obtain a free copy of the guidelines are given at the end of this article.

The guidelines set out points for consideration which may be relevant according to the individual circumstances of the person making the EPA. Different considerations will, of course, apply to donors who make an EPA as a precautionary measure while they are still in the 'prime of life' and those who are of borderline mental capacity, where the EPA may need to be registered immediately.

Who is the Client?

The guidelines stress that where a solicitor is asked to prepare an EPA, the donor is the client. Although family members may be involved in giving instructions the solicitor should check that these are in accordance with the donor's wishes, and in any case of doubt, should see the donor personally. A solicitor must not accept instructions where he/she suspects that those instructions have been given by a client under duress or undue influence.

If the donor later becomes mentally incapable, instructions may then be accepted from the attorney, but the solicitor continues to owe his/her duties to the donor. This has been confirmed by the Practice Statement issued by Mrs A B Macfarlane, former Master of the Court of Protection on 9th August 1995, which also sets out the procedures to be followed should any conflict of interest develop between donor and attorney.

The solicitor should be satisfied that, on the balance of probabilities at the time of drawing up the power, the donor has the mental capacity to make an EPA. If there is any doubt, a medical opinion should be obtained. The solicitor should inform the doctor of the test of capacity laid down in Re K, Re F [1988] 1 All E R 358, 363, a summary of which is set out in an appendix to the guidelines. Further guidance may also be found in Assessment of Mental Capacity: Guidance for doctors and lawyers issued by the Law Society and the British Medical Association (1995).

The guidelines set out a number of matters which it may be helpful for the solicitor to discuss with the donor at the time when the EPA is prepared. These are intended both to assist in making the terms of the power clear, in order to avoid confusion or conflict amongst those required to operate or abide by it at a later date, and also to avoid a number of pitfalls which could make the EPA invalid and unable to be registered by the Public Trust Office. Clearly at this point, the EPA cannot be corrected or amended, since the donor will no longer have the mental capacity to make a new EPA.

Choice of Attorney

The choice of attorney(s) is clearly a personal decision for the donor, but it is important for the solicitor to advise the donor of the various options available, and to stress the need for the attorney to be absolutely trustworthy, since on appointment, the attorney's actions will be subject to little supervision or scrutiny.

Where the donor wishes to appoint more than one attorney, it is important for the solicitor to explain that the attorneys must be appointed to act either 'jointly' or 'jointly and severally'. One of these two alternatives must be chosen, and the other crossed out on the prescribed form. Failure to cross out one of these alternatives makes the EPA invalid, and this is one of the most common reasons for the Court of Protection or Public Trust Office refusing to register an EPA.

The donor may have to make difficult choices as to which family member(s) to appoint as her/his attorney. It is possible to allow some flexibility, as in the following examples:

(i) The donor may wish to appoint a family member and a professional to act jointly and severally with, for example, the family member dealing with day-to-day matters, and the professional dealing with more complex affairs.

(ii) The donor may wish to appoint his/her spouse as attorney, with provision for their adult child(ren) to take over as attorney(s) should the spouse die or become incapacitated. One way to achieve this is for the donor to execute two EPAs: the first appointing the spouse as attorney, and the second appointing the child(ren) with a provision that it will only come into effect if the first power is terminated for any reason. Alternatively, the donor could appoint everyone to act jointly and severally, with an informal understanding that the children will not act while the spouse is able to do so.

(iii) The donor may wish to appoint three attorneys, for example his/her three adult children, with a proviso that anything done under the power should be done by at least two of them. To make the power valid, the three attorneys must be appointed to act jointly and severally. An accompanying statement would make clear the donor's wishes that anything done under the power should be done by at least two of the attorneys. Such a statement could not be enforced, but it would appear that most attorneys, whether family members or professionals would agree to abide by those wishes.

In any event, solicitors should encourage donors to tell their family they have made an EPA and explain why they have chosen the attorney(s) in order to reduce the risk of conflict at a later stage.

Other Instructions

The guidelines set out a number of other matters on which it may be advisable for solicitors to obtain instructions from the donor at the time when the EPA is prepared. These include:

When the power should come into effect, either immediately or when the need arises to apply to register the EPA
Whether the EPA will cover all or part of the donor's property and financial affairs, and if only part, what arrangements should be made for the management of those affairs not covered by the EPA.
The extent of the attorney's authority and whether any restrictions should be placed on what the attorney can do.
Whether the attorney will be allowed access to the donor's will or other documents. While the donor remains competent, he/she can authorise or refuse access to the will. However, once the EPA is registered and it is silent on the subject of disclosure, the position is unclear. Since the attorney may need to know about the contents of the will to avoid acting contrary to the donor's wishes, it may be preferable to set out in the EPA whether disclosure is denied or the circumstances in which it is permitted.
Where a solicitor is appointed as attorney, it is recommended that the solicitor's terms and conditions of business (including charging rates and frequency of billing) be discussed with and approved by the donor at the time of granting the power, and a professional charging clause be included in the power for the avoidance of doubt.

The Prescribed Form

Around 10 per cent of EPAs are refused registration because of a defect in the form or the wording of the instrument. Solicitors should ensure that existing but unregistered EPAs are in the form prescribed by Regulations valid on the date they were executed and that the form they are currently using is the one prescribed by the Enduring Powers of Attorney (Prescribed Form) Regulations 1990 (SI 1990 No 1376).

Provided the prescribed form is used, it does not matter whether it is a printed form from a law stationers or whether it is transcribed on to a word processor. What is essential, however, is that there should be no unauthorised departure from the prescribed form. Solicitors who have assisted a donor in drawing up an EPA which is subsequently refused registration may be liable if the defect is material, since at that point the donor may not have capacity to execute a new EPA, and an application for receivership may be necessary.

Registration of the EPA

The guidelines set out the requirements for the attorney to serve notice of his/her intention to register the power. The donor must be personally served with this notice either by the attorney or by an agent (perhaps a solicitor) acting on the attorney's behalf. The donor's relatives must be given notice by first class post.

Many attorneys, both relatives and professionals find it distressing to have to inform donors of the implications of their failing mental capacity. The Enduring Powers of Attorney Act 1985 (Schedule 1) makes provision for the attorney to apply to the Public Trustee for dispensation from the requirement to serve notice. However, dispensation is only likely to be granted where there is medical evidence to show the donor would be harmed or greatly distressed by the notice, since it is the donor's right to be informed and to have an opportunity to object to registration.

Significant problems continue to arise in cases where relatives raise objections to the registration of an EPA. Research carried out in 1991 (S Cretney, G Davis, R Kerridge & A Borkowski, Enduring Powers of Attorney: A Report to the Lord Chancellor's Department) indicated that in many cases, such objections often arose from family conflicts over which the Court of Protection has no jurisdiction. Solicitors asked to advise relatives in such cases should seek to avoid getting caught up in the family conflicts, and should instead try to find a solution in the best interests of the donor. In particular, the donor may have had strong personal reasons for choosing a particular attorney, which should be respected. However, in some cases, an application to the Court of Protection for the appointment of an independent receiver may be preferable than seeking to impose an attorney with whom key family members refuse to co-operate.

The Law Society's Mental Health and Disability Sub-Committee is keen to keep the guidelines for solicitors under review, and would welcome comments from practitioners on their usefulness, or otherwise, and on other matters which could usefully be addressed in any future version. Please send your comments to Penny Letts, Secretary to the Mental Health and Disability Sub-Committee at the Law Society.

Penny Letts, Secretary to Law Society's Mental Health and Disability Sub-Committee

Enduring Powers of Attorney: Guidelines for solicitors, Law Society (1996). Copies are available free of charge to solicitors by sending a stamped (50p) or DX addressed envelope to Annabelle Phillips, Publications Department, The Law Society, 50 Chancery Lane, London WC2A 1SX, or DX 56 London/Chancery Lane