Planning for the future involves ensuring that someone you trust can make important decisions on your behalf if you are no longer able to. This is commonly done through legal tools called Powers of Attorney. Two such legal documents are the Lasting Power of Attorney (LPA) and the Enduring Power of Attorney (EPA). Although both types of LPA serve a similar purpose, there are key differences between them.
AFG Law outline the main differences between lasting and enduring Powers of Attorney to help you understand how and when each can be used.
What is a Power of Attorney?
A power of attorney is a legal arrangement that allows an individual, known as the donor, to appoint another person or people, called attorneys, to make decisions on their behalf. These decisions can relate to property, finances, health, and welfare, depending on the type of authority granted.
What is an Enduring Power of Attorney?
Enduring Powers of Attorney were used before 1st October 2007 as the standard legal tool for managing someone’s financial affairs. They allowed an individual to appoint an attorney to deal with matters relating to their property and financial affairs.
Although Enduring Powers of Attorney can no longer be created, they can still be used today if they were properly made and signed before that date.
An Enduring Power of Attorney does not give authority to make health and welfare decisions on behalf of the donor, and they become effective immediately after being signed. However, if the donor loses mental capacity, the Enduring Power of Attorney must be registered with the Office of the Public Guardian (OPG) before it can continue to be used.
What is a Lasting Power of Attorney?
Lasting Powers of Attorney were introduced as part of the Mental Capacity Act 2005 to replace Enduring Powers of Attorney and provide a more modern and secure framework. Unlike EPAs, LPAs come in two distinct forms. One deals with property and financial affairs, while the other covers health and welfare matters. The property and financial affairs LPA enables attorneys to make decisions about money, bills, property, and other financial issues.
The health and welfare LPA allows attorneys to make decisions about care, medical treatment, and daily routines, but only when the donor has lost mental capacity and is no longer able to make those decisions themselves.
An important difference between the two types of power is that Lasting Powers of Attorney must be registered with the Office of the Public Guardian before they can be used, regardless of the donor’s mental capacity.
They also include greater safeguards, such as requiring a certificate provider to confirm that the donor is a mentally capable person, understands the document and is not under pressure. The donor also has the option to specify whether their financial Lasting Power of Attorney should be used only when they lose capacity or as soon as it is registered.
Should you replace an Enduring Power of Attorney with a Lasting Power of Attorney?
If you already have a valid Enduring Power of Attorney, there is no legal requirement to replace it. However, since Enduring Powers of Attorney do not cover decisions about health and welfare, many people choose to create a Health and Welfare LPA to ensure they are covered in all areas. Some may also opt to create a new Lasting Power of Attorney for financial affairs to benefit from the additional protections and clarity provided by the newer system.
You will be unable to directly change an Enduring Power of Attorney to a Lasting Power of Attorney. Instead, you will be required to cancel your Enduring Power of Attorney and set up new Lasting Powers of Attorney documents.
You can cancel your Enduring Power of Attorney as long as you still have the mental capacity to make your own decisions. To do this, a deed of revocation should be prepared, which you must sign in the presence of a witness. The witness must also sign the document and include their full name and address.
If the Enduring Power of Attorney has already been registered, you will also need to send a formal notice of cancellation to the Court of Protection, along with the required cancellation fee.
How AFG LAW can help
If you still have questions regarding the differences between Lasting and Enduring Powers of Attorney, speak to us today.
At AFG LAW, our Private Client Department specialise in wills, powers of attorney and estate planning, helping clients make informed decisions about their future. Whether you need to create a will, update an existing one, or set up a LPA, AFG LAW is here to help.
Don’t leave things to chance – ensure your loved ones are protected and your wishes are honoured. Call our expert, compassionate, Private Client team today on 01204 920107 or email info@afglaw.co.uk.