In 2005, the Mental Capacity Act essentially replaced Enduring Power of Attorney with the similar but more complete Lasting Power. But what is the difference between Enduring and Lasting Power of Attorney?
Because, technically speaking, both types of Powers of Attorney do remain in effect. You simply can’t apply for “Enduring Power” anymore.
Here is everything you need to know about what is the same and what has changed and whether you need to make any changes to your existing arrangements.
What is a Power of Attorney?
A Power of Attorney is a legal document that gives one person (the attorney) the legal right to manage the affairs of another (the donor). Today, there are two different types:
- Ordinary Power of Attorney – is temporary, usually covering times of hospitalisation or absence from the country.
- Lasting Power of Attorney – an LPA tends to come into effect when a person loses mental capacity, giving another person the right to manage their affairs on an ongoing basis.
Prior to 2007 though, instead of Lasting Power of Attorney, roughly similar circumstances and needs were covered by Enduring Power of Attorney.
However, there were some limitations to Enduring Power that eventually saw it being replaced.
What is an Enduring Power of Attorney?
Before 2007, it was possible to set up an Enduring Power of Attorney to give another person the right to make important decisions about your property and financial affairs.
As a donor, you still had to have mental capacity – the proven ability to understand the effects of your decisions – before you could sign over the right. However, some EPAs stated that they could only be registered when the donor started to lose that capacity.
This created a weird legal area where a donor needed their attorney to act because they no longer had mental capacity, but the attorney was not able to do so because the donor no longer had the mental capacity required to register the EPA.
Another vital missing factor here was that an EPA did not give an attorney the right to make medical or well-being decisions on a donor’s behalf. In 2007, changes were made to make this a possibility.
What is a Lasting Power of Attorney?
Lasting Power of Attorney replaced EPA in 2007. This superseded the older rights, but existing EPAs do remain in effect.
It’s worth noting that, in a big change from EPAs, LPAs are usually registered in advance and come into effect after a person has lost the mental capacity or desire to make key decisions. They don’t need to be registered at a specific time and then instantly come into force.
An LPA is a good plan if someone knows their mental capacity is likely to deteriorate in coming years and wants to know their affairs will be managed by someone they trust.
There are also two different types of Lasting Power of Attorney. These are:
- Property and finance LPA – this covers effectively the same ground as the old EPA, allowing a donor to make decisions about property, bank accounts, investments, pay bills, and other financial matters on someone’s behalf.
- Health and welfare LPA – covers the previously missing part of the law, allowing a donor to make decisions about where a person lives, who they see, what they eat, and the kind of medical care they receive.
The difference between Lasting and Enduring Power of Attorney
Though there are many similarities between the two, there are key differences between Lasting and Enduring Powers of Attorney:
- Date of commencement – an EPA came into effect as soon as it was registered. LPAs usually come into effect when a person loses mental capacity in future.
- Method of registration – you need or needed to apply to the courts to have an EPA come into effect. An LPA needs to be registered with the Office of the Public Guardian but comes into effect without court action.
- Areas of decision making – an EPA covered only financial affairs and property, while there are two different types of LPA. One of these covers health and welfare.
- Who can be appointed – an EPA had more precise regulations about who could be given a Power of Attorney. Multiple people could also be appointed, unlike an LPA. An LPA does give someone the right to delegate decisions, however.
- Witnessing – an LPA needs to be supported by a qualified witness who confirms that a person no longer has mental capacity before it comes into effect.
Should I convert Enduring Power of Attorney into Lasting Power of Attorney?
There are some limited circumstances where an existing Enduring Power of Attorney might still cover what you need. They’re still valid and you don’t have to convert one into an LPA unless it makes sense to do so.
However, LPAs have many advantages. They’re more flexible, they offer greater protection, and they’re more actionable in that they can be registered immediately and only come into effect after it’s been proven independently that you need it to.
The best course of action when understanding the difference between Enduring and Lasting Power of Attorney and whether it makes sense to convert one into the other is always to ask your solicitor for their expert advice.
Want to talk through which Power of Attorney makes sense for you or a relative’s situation?
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