Difference Between Lasting and Enduring Power of Attorney: A Comprehensive Guide
Understanding Power of Attorney
A Power of Attorney (POA) is a legal document allowing an individual, known as the donor, to appoint someone they trust, referred to as the attorney, to make decisions on their behalf. These decisions could range from financial matters to health and welfare. In the UK, the most common types are the Enduring Power of Attorney (EPA) and the Lasting Power of Attorney (LPA). Although they may sound similar, there are critical distinctions between them that anyone planning their estate or making provisions for future incapacity should understand.
The Difference Between Lasting and Enduring Power of Attorney
The primary difference between lasting and enduring power of attorney lies in the scope, timing, and legal framework under which they operate. Here’s an in-depth comparison to highlight their unique attributes:
Introduction to Enduring Power of Attorney (EPA)
What is an EPA? Introduced under the Enduring Powers of Attorney Act 1985, the EPA was designed to allow donors to appoint attorneys to manage their financial and property affairs. It was intended to provide a straightforward method of delegating these responsibilities in case the donor lost the ability to manage them due to mental incapacity.
Scope of EPA An EPA focuses solely on financial and property matters. It does not cover decisions related to the donor’s health and welfare, which means the attorney has no authority over medical or care-related choices.
Registration and Activation An EPA can be used as soon as it is signed. However, if the donor loses mental capacity, the attorney must register it with the Office of the Public Guardian (OPG) to continue acting on the donor’s behalf. This registration process is a safeguard that ensures the donor’s best interests are protected once they are unable to make decisions independently.
Limitations
- No Health and Welfare Authority: EPAs do not grant attorneys the power to make health and welfare decisions.
- Obsolete for New Users: After 1 October 2007, EPAs were replaced by LPAs. While existing EPAs remain valid, no new EPAs can be created.
Introduction to Lasting Power of Attorney (LPA)
What is an LPA? The Lasting Power of Attorney was introduced under the Mental Capacity Act 2005, which came into effect on 1 October 2007. LPAs were developed to provide a more comprehensive approach, allowing individuals to plan for future incapacity with both financial and health-related decisions.
Types of LPAs
- Property and Financial Affairs LPA: Similar to the EPA, this type allows an attorney to manage the donor’s financial matters, such as property transactions, bill payments, and investments.
- Health and Welfare LPA: This enables the attorney to make decisions regarding the donor’s personal health and welfare, including medical treatment and living arrangements. This type of LPA only becomes active when the donor loses mental capacity.
Registration and Activation An LPA must be registered with the OPG before it can be used, regardless of the donor’s mental state. This requirement ensures that LPAs are properly validated before attorneys assume any decision-making authority. The Property and Financial Affairs LPA can be activated with the donor’s consent while they still have capacity, but the Health and Welfare LPA can only be used when the donor lacks capacity.
Enhanced Safeguards LPAs include built-in safeguards, such as the need for a certificate provider who confirms that the donor understands the document and is not under undue pressure to create it. This additional step offers more protection compared to EPAs.
Differences in Legal Framework and Flexibility
The legal framework surrounding EPAs and LPAs is different due to their historical and legislative context:
- EPAs were governed by the Enduring Powers of Attorney Act 1985, focusing on simplifying financial delegation. The replacement by LPAs was part of an effort to create a more versatile and protective system for individuals planning for potential mental incapacity.
- LPAs fall under the Mental Capacity Act 2005, which emphasizes safeguarding vulnerable individuals through more comprehensive regulations.
Flexibility and Replacement Attorneys LPAs offer more flexibility than EPAs. For instance, donors can appoint replacement attorneys in an LPA to step in if the original attorney is unable or unwilling to act. This option ensures continuous representation without legal disruption.
Why Consider Replacing an EPA with an LPA?
If you have an existing EPA, you might wonder if it’s worth updating to an LPA. Here are some reasons why this can be a wise decision:
- Expanded Authority: An LPA allows for health and welfare decisions, something an EPA cannot provide.
- Improved Safeguards: LPAs include a certificate provider, which adds a layer of verification and prevents potential misuse or coercion.
- Modern Legal Standards: LPAs comply with current regulations under the Mental Capacity Act, ensuring that your wishes are supported by up-to-date legal practices.
Difference Between Lasting Power of Attorney and Enduring
The difference between a lasting power of attorney and enduring power of attorney can be summarized through their scope, functionality, and security measures:
- Scope of Power: LPAs cover both financial and health/welfare decisions, while EPAs are limited to property and financial matters only.
- Registration Process: LPAs must be registered before use, whereas EPAs only require registration once the donor loses mental capacity.
- Flexibility: LPAs allow for the appointment of replacement attorneys, which is not possible in EPAs.
- Security and Safeguards: LPAs offer a certificate provider and other checks to ensure that the document is created under the right circumstances.
Conclusion
Understanding the difference between lasting and enduring power of attorney is crucial when making decisions about future planning. While EPAs were once an effective tool for financial delegation, their limitations make LPAs a more comprehensive and protective option. With the ability to manage both financial and health-related decisions, LPAs offer broader authority and enhanced safeguards. For those holding an EPA, considering an update to an LPA can ensure peace of mind and compliance with modern legal standards.
Preparing for future incapacities is a responsible step that can prevent legal complications and ensure your wishes are respected. Opting for an LPA is a forward-thinking choice that reflects the evolving landscape of legal protections and estate planning.
