Enduring Powers of Attorney - Some Common Queries

The area of Enduring Powers of Attorney is not as simple as it may at first appear.
In this article Heather Redman, a senior solicitor specialising in wills and tax planning, probate and attorneyship, looks at common problems from the client's perspective.

Enduring Powers of Attorney have been with us since 1985. Although the principle of an Enduring Power of Attorney (EPA) is relatively straightforward, in practice things are rarely that simple. I have set out some common queries or problems which often arise.

I don't want my attorney to be able to sell my house.

It is possible to restrict the EPA so that it will only apply to certain assets. However, although the donor may feel that this will prevent the attorney selling the house over her head, if she became mentally incapable and had to go into a nursing home, it is quite likely that the house would have to be sold in order to pay the fees. At the very time when the EPA would be most useful, application to the Court of Protection would have to be made to enable the house to be sold.

If the donor is worried that the attorney may sell the house over her head, then it may be that she has not chosen the right person to act as her attorney. The donor must have absolute confidence in her chose attorney. Once appointed, a sole attorney is subject to no external supervision. It is often helpful to give specific examples to the donor when drawing up the EPA of what the attorney can do e.g. "your attorney will be able to sell your house and draw cheques on your bank account.

I only want the EPA to come into effect if I became mentally incapable.

It is possible to put a restriction in, for example, that the EPA will only take effect if a medical practitioner confirms in writing that the donor is mentally incapable of dealing with her affairs. However, this would mean that the EPA could not be used if for example the donor broke her arm and was unable to sign any documents. In addition, in theory at least, the attorney would have to produce not only the EPA, but also written confirmation from a doctor that the donor was mentally incapable before the power could be used. This would make matters complicated, particularly in a situation where speed was necessary, e.g. if shares needed to be sole quickly.

Perhaps a more practical solution is for the EPA to contain no restrictions, but for it to be kept at a solicitor's office, only to be released on the authority of the donor, or if the solicitor is satisfied that the donor no longer has mental capacity. This can be verified by a visit to the donor, and backed up by medical evidence if necessary.

I want to revoke my EPA

An EPA can be revoked at any time, provided the donor still has mental capacity. If the EPA has been registered then consent will be required from the Court. The attorney should be notified in writing, as should any banks, building societies etc. If they are not notified, then the attorney could still continue to use the EPA and the bank etc would not be liable if they did not have notice of the revocation. Although the legislation does not contain specific provisions regarding the revocation of an EPA, this should preferably be done by means of a deed, and the original EPA clearly marked to indicate that it has been revoked. Any certified copies which have been sent out should be returned.

My mother has made me her attorney and the EPA has now been registered. Our local church has an appeal, and I would like to make a donation on my mother's behalf using her money, as she is a keen supporter.

An attorney cannot usually use an EPA to make gifts. The attorney, can make gifts "of a seasonal nature" to "persons (including himself) who are related to or connected with the donor." The attorney may also make gifts to "any charity to whom the donor made or might be expected to make gifts".

This will enable the attorney to make gifts to the church if the donor was in the habit of making such gift, or might be expected to, as she is a keen church goer and was previously in the habit of making donations to the church.

Attorneys should note that the value of the gifts must be reasonable giving regard to the donor's circumstances and assets.

If the donor still has capacity when a gift is intended, it would be better if she makes the gift personally, or provides written confirmation that the gift should be made. If the donor has become mentally incapable and an application to register the EPA has been made the attorney cannot make any gifts until the EPA has been registered.

My mother gave an EPA to her solicitor; she has now died, and I am the executor of the Will. Am I entitled to require the solicitor to account for the money he has received and spent whilst he acted as her attorney?

The donor of the EPA could require the solicitor to account for his or her actions whilst she was alive. After the donor's death, you as the personal representative of the donor stands in her shoes, and can require the attorney to account for monies received and spent.

In general where a solicitor acts as a sole attorney, it is important to keep good accounts, and it is wise to assume that the personal representatives will require sight of these.

Where a solicitor acts as an attorney, it is worth including a charging clause in the EPA similar to a charging clause in a Will, as otherwise the attorney can only claim payment of out of pocket expenses. This must of course be discussed with the donor at the time when the EPA is drawn up.

I want to appoint my wife to be my attorney, but I would like my children to act after my wife's death.

Under the terms of S11 (1) of the EPA Act 1975 it is not a substitutional appointment. It is best to have two separate EPA's. The first one would simply appoint the wife as attorney. The second EPA will appoint the children as attorneys, but will contain a restriction, so it will only come into effect if the wife is mentally incapable, or has died, or is unwilling to act.

Alternatively, and more simply, the donor could appoint the wife and the children "jointly and severally", and the attorneys could agree between themselves that the wife would act on her own during her lifetime, and the children would act if she had died or was unable to. It is vital here that the attorneys are appointed "jointly and severally", otherwise the death of the wife (or indeed her subsequent mental incapacity or a disclaimer) would mean that the EPA is no longer effective. Some practitioners view EPA's as very straightforward documents, which can be prepared without much thought. However, problems can arise, and it is important that all aspects are talked through with the donor before the EPA is actually signed. For this reason, it is usually unsatisfactory simply to send a EPA out to the donor by post to sign. An hour or so spent discussing the EPA prior to its signature can save many problems later.

Heather Redman, Senior Solicitor, Cole & Cole