Managing your finances in the event of incapacity - 20 November 2006

Q1: A friend is sadly suffering from dementia and my son and I worry about managing my finances if this happens to me. What can I do?

A1: You can have an Enduring Power of Attorney (EPA) drawn up. This is a complex document and you’ll need specialist legal advice but it can prove very useful. Your son could then sign consents on your behalf regarding your finances if you are unwell. He could continue to do so if you suffer from permanent mental incapacity and cannot manage your finances due, for example, to dementia.

It is crucial to make an EPA whilst you are well and can understand the document. Sadly, many people leave it too late. If this happens, a relative must make an application to the Court of Protection to become a receiver. This is time-consuming and expensive, and often causes carers extra stress at a difficult time.

In April 2007, EPAs will be replaced by Lasting Powers of Attorney. This is an even more complicated document and, unlike an EPA, it has to be registered before it can be used, even if the person has full understanding of the document at the time. We estimate that an LPA may cost 3-4 times more than an EPA. The good news is that an EPA made before April 2007 will still be valid, so making one now means you will be protected and will save money.

EPAs are not only useful for the elderly. Anyone can suffer from mental incapacity, e.g. injury in a car accident. Young and old should consider an EPA, just as they should have a Will. No-one knows what’s around the corner but if you protect yourself with a Will and an EPA, if the worst does happen, you will have made life a little easier for your loved ones.

Karen Beynon, 01275 850460
karen.beynon@wards.uk.com