What is the Difference Between a Lasting and Enduring Power of Attorney?

04 Sep What is the Difference Between a Lasting and Enduring Power of Attorney?

The two main types of Powers which can be created now are both Lasting Powers of Attorney (LPA), either Property and Financial Affairs, or Health and Welfare. However, before their introduction and the advent of the Mental Capacity Act in 2005 it was possible to create a different type of Power, called an Enduring Power of Attorney (EPA).

Since October 2007 it has not been possible to create a new EPA. However, existing, validly created EPAs were not invalidated by the advent of the new regime, but they do work in a different way to the newer LPA system.

LPAs were introduced in the Mental Capacity Act 2005 and are a more modern and comprehensive form of power of attorney. They allow someone (who is known as the donor) to appoint one or more individuals (attorneys) to manage their affairs, both financial and health-related, in the future. LPAs must be registered with the Office of the Public Guardian (OPG) before they become valid.

EPAs were introduced under the Enduring Powers of Attorney Act 1985. An EPA grants an attorney authority to handle the donor’s financial matters only. An EPA does not have to be registered to be used, but it does need to be registered with the OPG if the donor ‘has become or is becoming mentally incapable’. Providing it is registered with the OPG at that point, it remains valid even after the donor loses mental capacity.

If you have already created a valid EPA and you do not need to change it for any reason (such as your attorney having passed away) then they remain valid and able to be used in relation to your financial affairs.

There is a difference in the level and scope of authority which is granted to an attorney under LPAs and EPAs.

LPAs are more extensive in scope, offering two distinct types: Property and Financial Affairs, and Health and Welfare. Property and Financial Affairs Powers give an attorney power to manage the donor’s finances and property matters, such as making a decision (or helping them to make a decision) on how to manage their money, taxes, pensions, and benefits. Health and Welfare Powers give authority over health and personal welfare decisions if the donor has become incapable of looking after their own decisions. This could include deciding where they live or accepting certain medical procedures.

EPAs, on the other hand, only cover the donor’s financial affairs. They do not provide authority over health or welfare decisions. If a donor has already completed a valid EPA and they wish to grant decision-making powers for health and welfare matters, they would need to create a separate Health and Welfare LPA.

The introduction of the new regime was also to remove some of the issues which had arisen in relation to the creation of EPA’s. Creation of an LPA includes additional safeguards to protect the donor’s interests. Before the LPA can be registered with the OPG and used, a “certificate provider” (usually a professional or someone who has known the donor for a long time) must confirm that the donor understands the LPA and is not being unduly influenced. Creation of an EPA did not require these modern safeguards, making them potentially more vulnerable to abuse, coercion, or misuse.

In conclusion, while LPAs and EPAs both allow an attorney to make decisions on behalf of an individual, there are crucial differences between the two.

Understanding the differences is also important for the appointed attorney. If you continue to use an EPA when it should be registered with the OPG because the donor has lost mental capacity, an attorney could find themselves in real difficulties. Registration of an EPA with the OPG is an important step in protection of the donor and the attorney.

A word of warning, some rather unscrupulous LPA providers have been known to insist that EPAs are not valid now and clients have been talked into making new LPAs at an inflated cost when they do not need to do so.

If you have any queries or questions about your EPA if you are the donor, or if you are an attorney and are not sure what to do next, contact us for an informal chat and we can look at the options available and provide advice about the next steps.