Alternative or successive EPAs

 In Comment

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Although no new Enduring Powers of Attorney (EPAs) can be created since 30 September 2007 there are nevertheless thousands of EPAs in existence and their validity may only be checked when registration is attempted.

There is no limit on the number of EPAs a donor can create and in the case of multiple appointments they can be concurrent or successive. The recent case of Re J [2009] EWHC 436 has considered whether a single EPA was valid, which purported to appoint the donor’s spouse but should she predecease the donor or be unable to act or continue to act then in the alternative his three sons jointly and severally.

At common law a power of attorney is an agency created by deed. The agency is terminated by the subsequent loss of mental capacity by the donor of the power. This defect in the law was addressed by the Enduring Powers of Attorney Act 1985.

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Since 1 October 2007 with the coming into force of the Mental Capacity Act 2005 it is no longer possible to create an EPA. Instead, a power of attorney which survives the mental incapacity of the donor is a Lasting Power of Attorney (LPA). Pre-existing EPAs continue to have effect and Schedule 4 Mental Capacity Act 2005 sets out the law applicable to EPAs, substantially re-enacting the Enduring Powers of Attorney Act 1985.

The EPA must be in the prescribed form but regulation 2(1) Enduring Powers of Attorney (Prescribed Form) Regulations 1990 positively allows the donor to make additions to the prescribed form. Regulation 4 provides that “where there is more than one attorney appointed and they are to act jointly and severally, then at least one of the attorneys so appointed must execute the instrument for it to take effect as an EPA and only those attorneys who have executed the instrument shall have the functions of an attorney under an EPA in the event of the donor’s mental capacity or of the registration of the power, whichever comes first.”

If two EPAs can be valid why not one for successive attorneys?

In Re J [2009] EWHC 436 Mr J executed a document the relevant part of which said:

“ I .. appoint my wife to be my Attorney for the purposes of the Enduring Powers of Attorney Act 1985 but if she shall have predeceased me or shall be unable to act or to continue to act as my Attorney whether registered or unregistered then in the alternative I appoint my son [A] and my son [B] and my son [C] jointly and severally to be my attorneys for the purposes of the Enduring Powers of Attorney Act 1985 with general authority to act on my behalf in relation to all my property and affairs.”

This form of wording was based on Form 147 in volume 31 of the Encyclopaedia of Forms & Precedents.

The Public Guardian refused to register Mr J’s EPA because it was said that he was precluded from doing so by paragraph 20 of Schedule 4 to the Mental Capacity Act 2005 which said that an instrument appointing more than one person to be an attorney could not create an EPA unless the attorneys were appointed to act jointly, or jointly and severally.

Counsel representing the Public Guardian believed the EPA to be invalid because it purported to appoint attorneys in the alternative. If that was valid then he also argued that a valid EPA cannot appoint successive attorneys where the power contemplates that one of the attorneys might begin to act before subsequently ceasing.

Mr Justice Lewison said that a donor may create one power in favour or his wife and another in favour of his children, but the latter would need to be subject to a condition that it is not to come into operation unless his wife disclaims under the first power. The same technique may be used to create EPAs that have successive operation e.g. the power in favour of the children is not to come into operation during the lifetime of the donor’s spouse.

In such a situation, on registration when the donor was no longer mentally capable both the successive powers would have to be registered.

Evidence was put before the Judge of differences of opinion in publications issued for the benefit of the public as to the interpretation of par 20 Schedule 4 Mental Capacity Act 2005 and of examples of EPAs which were worded in a similar way to Mr J’s which had been registered although stamped with words to the effect that they took effect only as regards particular named attorneys.

Complexities?

In support of the Public Guardian’s argument reference was made to the Law Commission Report that preceded the Enduring Powers of Attorney Act 1985 in which it recommended that an instrument should not be able to provide for successive attorneys because of the complexity that such powers would create.

Lewison J dismissed each of the arguments as to possible complexity which combining successive appointments in one document would create. In particular, he could not see why a donor of an EPA could not specify for each of two sets of attorneys whether, for each set, the donees were to act jointly or jointly and severally.

He equally felt that conditional appointments were always going to be difficult for a third party to know whether the condition was fulfilled or not irrespective of whether the appointments were contained in one document or two.

He decided that Mr J’s EPA was valid and that it was possible for one document to appoint attorneys in the alternative or successively provided it was clear in each case whether the attorneys must exercise their power jointly or jointly and severally. If this was clear then the EPA complied with par.20 Schedule 4 Mental Capacity Act 2005.

Practice point

For EPAs which purport to appoint alternative or successive attorneys check that the wording you have used makes it clear the basis on which the attorneys are to act. If the power is incorrectly worded and the client is still competent an LPA may now be needed. If the client is becoming or has become mentally incapable, and therefore it is not possible to make an LPA, be warned that the EPA will not be valid and registration will fail necessitating the application to the Court of Protection for the appointment of a Deputy.

© Gill Steel, LawSkills Ltd. 2009

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