A key document that is often overlooked in estate planning is a Power of Attorney. This document allows you to appoint trusted individuals, known as your “attorneys”, to act on your behalf in specific circumstances. A common source of confusion is the distinction between an Enduring Power of Attorney (EPA) and a Lasting Power of Attorney (LPA). This article aims to clarify the differences between the two and help readers better understand their options.
What is an Enduring Power of Attorney?
An Enduring Power of Attorney (EPA) is a legal document that enables an individual (the “donor”) to appoint another person or persons (the “attorney(s)”) to manage their property and financial affairs on their behalf. An EPA can be used while the donor still has mental capacity. However, once the attorney believes that the donor is becoming, or has become, mentally incapable of managing their own affairs, the EPA must be registered with the Office of the Public Guardian (OPG) before it can continue to be used. Registration is subject to a fee and can take time to process.
It has not been possible to create new EPAs since 1 October 2007, when they were replaced by Lasting Powers of Attorney (LPAs). Existing EPAs remain valid if they were correctly executed before that date. EPAs do not allow for the appointment of replacement attorneys. This means that if an appointed attorney is unable or unwilling to act, the EPA may no longer be effective.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal document that allows an individual (the “donor”) to appoint one or more people (the “attorney(s)”) to make decisions on their behalf. Unlike an EPA, there are two types of LPA: one covering property and financial affairs, and another covering health and welfare matters. An LPA must be registered with the Office of the Public Guardian (OPG) before it can be used. This can be done as soon as the document is created. Registration is subject to a fee and can take time to complete.
A property and financial affairs LPA can be used either while the donor still has capacity (if the donor chooses) or only after capacity has been lost. In contrast, a health and welfare LPA can only be used once the donor has lost mental capacity. LPAs also allow the donor to appoint replacement attorneys. This means that if an original attorney is unable or unwilling to act, the replacement can step in, helping to ensure the LPA continues to operate as intended.
What is the Difference between Enduring and Lasting Powers of Attorney?
There are two key differences to be aware of when comparing an EPA and an LPA.
Firstly, an EPA applies only to property and financial affairs. This means that if the donor loses mental capacity, the attorney(s) may deal solely with matters such as property, assets, and bank accounts. Decisions relating to health and welfare – including medical treatment, care arrangements, and living arrangements – cannot be made under an EPA, unlike an LPA.
Secondly, an EPA must be registered with the Office of the Public Guardian once the donor’s mental capacity begins to decline or has been lost. It is often at this point that the document is needed most, and the requirement to register can result in unavoidable delays before the attorney(s) are able to act. By contrast, an LPA can be registered with the OPG as soon as it is made.
Early registration can help avoid delays and ensure that the attorney(s) are able to act promptly when needed. This distinction can be of particular importance in urgent or time‑sensitive situations.
Should I update my EPA to an LPA?
Whether an individual should replace an existing Enduring Power of Attorney with a Lasting Power of Attorney is a question frequently considered by private client practitioners. While there is no legal requirement to update to an LPA, doing so may be beneficial in certain circumstances.
An EPA remains legally valid provided it was properly executed before 1 October 2007. However, it is generally recommended that powers of attorney are reviewed every three to five years. Given this, it may be sensible to review an EPA to ensure it still reflects your current wishes – particularly as many EPAs will have been created over 19 years ago. It is important to note that an EPA cannot be amended once it has been made. If your circumstances or wishes have changed, the existing EPA would need to be formally revoked and replaced with an LPA.
If an individual only has an EPA in place it is recommended that they should also make a health and welfare LPA.
How can Ellisons Help?
Our experienced Wills, Trusts and Probate team can guide you through any powers of attorney you already have in place, as well as advise on any changes you may wish to make. We provide clear, expert guidance to help you understand the potential benefits of reviewing your EPA and, where appropriate, revoking it and creating an LPA. A member of our team would be delighted to assist you, helping you to plan for the future with confidence and peace of mind.
