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Managing personal financial affairs
As a person grows older or becomes infirm, it may be difficult for them to look after and manage their own personal financial affairs. If the person has capacity, e.g. understanding, they can decide to authorise a person of their choice to act on their behalf by giving that person an Enduring Power of Attorney (EPA). However if a person does not have capacity, an application will have to be made to the Court of Protection for someone to be appointed the person’s receiver.
Enduring Power of Attorney (EPA)
An Enduring Power of Attorney (EPA) is a document which allows a person to carry on another person's wishes. An EPA has to be given by a Donor (the person who wishes his/her affairs to be dealt with by someone else). It cannot be obtained by the Attorney (the person who is responsible for carrying on the affairs of the Donor). An EPA must be prepared in a statutory legal form and after full discussion with the Donor, and has to be signed by the Donor and Attorney(s) in the presence of a witness. The person giving the EPA must have capacity.
The Donor must be capable of understanding the nature of the EPA, and what they have intended it to be used for. When the time arrives and the Donor does not have capacity, the EPA should then be registered with the Public Guardianship Office.
Please note that Enduring Power of Attorney will be renamed as Lasting Power of Attorney (LPA) in the near future.
The Court of Protection
This is a division of the Public Guardianship Office, and is based in London. It exists to safeguard the financial affairs of people who are not capable of managing their own affairs. Dealings with the court are normally carried out by post or on the telephone and rarely require personal attendance at court hearings.
If a person loses capacity, then a relative, friend or professional adviser of the person concerned will have to apply to the Court of Protection to be appointed as the person’s Receiver.
The Receiver must operate strictly in accordance with the Extended General Order or Directions granted by the court. The receiver must at all times act in the best interest of the incapacitated person. They will also have to give an account to the court on an annual basis of all that has been done in dealing with the persons affairs.
Is an EPA or Receivership Order Necessary?
If the person’s affairs do not involve the ownership of property, savings or investments, it is possible to make simpler arrangements. A person can apply to the Benefit Agency to become the Appointee on behalf of the person who is incapacitated. This means they will receive and be responsible for all aspects of their benefits.