Enduring Powers of Attorney - Mind the Gap with the English Equivalent

Posted on February 05, 2016

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Advocate Nadine Roberts of M&P Legal explains how enduring powers of attorney work in the Isle of Man and how their use will increase with the ageing population

Why is a Power of Attorney useful?

A Power of Attorney document allows you (‘the donor’) to appoint an individual or individuals (‘an attorney’ or ‘attorneys’) to help manage your property and financial affairs. This document can be very useful for those that are often away on business or have taken up residence in another country, the elderly or those with a disability. As we live longer and with the consequent increase in dementia issues, more and more families will realise that they need to explore the use of an enduring power of attorney to help protect, for instance, ageing parents.

Who can make a Power of Attorney?

Anyone over 18 can make a Power of Attorney provided that they have the appropriate mental capacity to understand the effects of making the power. If a person does not have the necessary capacity, other more complex solutions such as an application for Receivership under the Mental Health Act 1998 would have to be considered.

What is different about an Enduring Power of Attorney?

If the donor has executed what is known as a ‘general Power of Attorney’ document, the power would become void if the donor lost mental capacity. However executing an Enduring Power of Attorney is a simple, practical solution that allows attorneys to continue acting under their powers. An Enduring Power of Attorney document can be used in the same way as a general Power of Attorney whilst the donor has capacity. However, if the donor does lose mental capacity, the Enduring Power of Attorney document can be registered at the Isle of Man High Court of Justice and those appointed as an attorney can continue to use the power. Until registration, the donor can revoke an Enduring Power of Attorney at any time.

When should you make an Enduring Power of Attorney?

An Enduring Power of Attorney can be of particular benefit to those with elderly relatives and with an ageing population, the demand for Enduring Powers of Attorneys will undoubtedly increase. It is something that anyone with ageing parents should be considering with them as a prudent planning step. That being said, unexpected illness or a serious accident that renders you incapable of managing your affairs can strike at any age. If you are already considering making a Will to deal with your affairs on death, it also makes sense to plan your affairs in the event of critical illness.

How can I ensure my wishes are followed?

Some people may be nervous about making an Enduring Power of Attorney due to the wide ranging powers bestowed on attorneys, including selling the donor’s home. However, restrictions and conditions can be placed on the Enduring Power of Attorney. Limitations such as only being able to use the power once you have lost mental capacity or excluding your Attorneys from dealing with certain matters like the sale of your property, can be written into the Enduring Power of Attorney document. It is prudent to seek legal advice on how an Enduring Power of Attorney can be tailored to meet your specific needs and to talk through eventualities that you may have not yet considered.
It may be tempting to try to avoid making an Enduring Power of Attorney by adding friends or relatives as joint owners on assets such as property and bank accounts. However, this approach is not generally advisable as it can cause unnecessary conflict and upset between family and friends, particularly when you pass away. When an asset is owned jointly (as joint tenants), that asset will automatically transfer to the survivor and falls outside of any Will or the intestacy rules. Beneficiaries are then left with the difficult task of proving that such a transfer was not the deceased’s intention.

Will my Attorneys be able to make medical decisions on my behalf?

An Enduring Power of Attorney does not allow attorneys to make decisions on medical treatment. It is possible to make a separate medical advance directive or ‘living will’. Under Manx Law these are not legally binding, but they would be persuasive if any dispute were to arise between your family and health care providers.

Can I make a Lasting Power of Attorney?

Under Manx Law, you cannot make a Lasting Power of Attorney. In 2007, Lasting Powers of Attorney replaced Enduring Powers of Attorney in England and Wales. The procedure regarding the creation of a Lasting Powers of Attorney is very different to that of creating an Enduring Power of Attorney. Exercise caution therefore if considering guidance from England and Wales when completing a Manx Enduring Power of Attorney document. If you have a Lasting Power of Attorney and either live on the Isle of Man or have assets on the Isle of Man you should seek legal advice as to whether this can be used by your attorneys to administer your Manx based assets.

Nadine Roberts is an Associate Advocate at M&P Legal with an interest in private client work. Specific legal advice should be sought on each individual’s circumstances.

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