Appoint an attorney now, elderly warned

Older people who fear they may become unable to deal with their financial affairs should consider appointing a trusted relative, friend or professional to act on their behalf before a new law makes it more difficult and expensive to do so, according to law firm DWF.

Under the current rules they can make an enduring power of attorney (EPA), giving one or more people the legal right to act on their behalf in matters of money or property. They can choose to make it effective straight away or continue to manage their own affairs for as long as they are able to do so. Then if they do lose their mental capacity, the EPA can be registered with the court and brought into effect. However this system will be replaced by Lasting Powers of Attorney (LPA), although the implementation date has not yet been set. There will be two types of LPA – one to cover finances and one for decisions on health and welfare issues. LPAs will be more complex and costly to set up and will have to be registered with the court before they can be used, not just at the point in time they are required.

Unlike an EPA, an LPA will only be effective if it has been registered before it can be used – even if the person giving the LPA still has the capacity to manage their own affairs.

Additionally the LPA is not valid unless a third party will certify that the person signing it fully understood the document. This means that LPAs will be more time consuming and therefore more expensive to make.

More costly

Emma Gaudern, head of private client services at the Manchester office of DWF, said: "Once the new law comes into effect, it will no longer be possible to set up an EPA although existing EPAs will still be valid. While there are merits in the new system, the EPA is a less onerous and less costly way to appoint an attorney. We would urge anyone concerned about their financial affairs to take advantage of the existing system while they still can."

According to the Alzheimer's Society, over 750,000 people in the UK suffer from dementia – one in 20 people over the age of 65 and one in five of those over 80.

Ms Gaudern added: "If someone does lose his or her mental capacity without appointing an attorney, it can cause enormous problems for carers as they may be unable to access funds or make financial decisions.

"Having a proper arrangement in place gives elderly people the chance to say who they want to run their affairs in their future and makes it easier for family and friends to look after them."