Estate Planning & Tax bulletins
New lasting power of attorney forms
On 1 October 2007 the former enduring power of attorney (EPA) was replaced by the new system of lasting powers of attorney (LPA). If the EPA system had its drawbacks, it did at least have the merit of involving much less paperwork than the LPA system. It also enabled a power of attorney to be used on behalf of someone who was not mentally incapacitated without the intervention of a registration process. In many ways it was the mere fact that the EPA system was so straightforward that led to its downfall. There was a perception by the relevant authorities that it was simply too easy to get a vulnerable, particularly elderly, person to sign an EPA in inappropriate circumstances and for their affairs then to be administered (or maladministered) without any official intervention. In short, there was simply too much scope for fraud.
Whereas EPAs involved forms which could be as short as four pages (and a maximum of 7 pages) the LPA form runs to some 25 pages. In addition separate LPAs must be executed for property and affairs on the one hand and personal welfare on the other (the latter being something not previously covered by EPAs). In addition, LPAs cannot be used in any circumstances without firstly being registered with the Office of the Public Guardian (application form 14 pages) and notices being sent to up to five ‘third parties’ (four pages per notice). LPAs are not rainforest friendly!
Since the introduction of the new system there have been many criticisms about the form of the documentation, particularly the LPA forms themselves. Even to the layperson the forms appear ill-designed, and apparently ‘psychological tests’ have confirmed that the design itself led to many mistakes in the completion of the forms, e.g. boxes which needed to be completed being tucked away in obscure corners rather than being specifically brought to the attention of the person completing the form. In time professionals got used to the odd quirks of the form (although plenty of mistakes were still made) but the forms were a nightmare for laypeople.
Ever since the new system was introduced there have been calls for its radical reform, but it appears that the government are determined to keep the system substantially in its present form. However it was agreed that the power of attorney forms themselves were badly designed and a working party was set up to improve them. This has now done its work and new forms are available for use as from 1 October 2009 (although the old forms will still be able to be used until 30 March 2011).
The new forms are much more logically set out and are several pages shorter. Therefore although the system remains fundamentally the same, the basic power of attorney forms should at least be a little easier to complete, particularly for the layperson, and the rainforests will get at least a little relief.
Whilst laypeople may find it reasonably easy to complete LPA forms in relatively straightforward circumstances, professional assistance would be recommended for more difficult situations such as:-
(a) The appointment of replacement attorneys.
(b) Situations where the authority of the attorneys is mixed, i.e. joint and several in relation to some matters but joint in relation to others.
(c) Situations where conditions are being placed on the circumstances in which attorneys may or may not act.
Michael Rapps 24 September 2009