If you created a power of attorney before 1 October 2007, it is likely to be an Enduring Power of Attorney (“EPA”). The problem is Lasting Powers of Attorney (“LPAs”) have now replaced EPAs causing a fair amount of confusion.
To help clarify the situation we have looked at both systems below.
Is my existing EPA still valid?
If you executed your EPA before 1 October 2007, it should still be capable of use. If you are happy with your EPA, you do not need to change to the LPA system.
You may wish to consider preparing an LPA if any of the following cause you concern.
1 – Your EPA does not deal with health decisions
Broadly speaking an EPA and a Property and Financial Affairs LPA serve the same purpose. They authorise people to make financial decisions on your behalf.
If you want your attorneys to make decisions about your health, you should consider preparing a Health and Welfare LPA.
Under a Health and Welfare LPA, if you lack mental capacity, your attorneys will be able to make decisions about the medical treatment you receive, where you live and everyday decisions regarding your diet, dress and routine. You can also give your attorneys the ability to grant or refuse consent to life-sustaining treatment.
2 – If you have only appointed one attorney under your EPA
If you have just appointed one attorney under your EPA, you are at risk. If your attorney dies before you or loses mental capacity, your LPA will fail. This is because there will be no one to act for you.
Under a new Property and Financial Affairs LPA, you can appoint co-attorneys and replacement attorneys.
3 – If you are unhappy with your attorney appointments
If you wish to change your current EPA appointments, you will need a new Property and Financial Affairs LPA. Unfortunately, you cannot amend your existing EPA.
4 – New LPAs offer greater safeguards and protections for donors
One of the primary differences between EPAs and LPAs is the point of registration with the Office of the Public Guardian (“OPG”).
While LPAs must be registered with the OPG before they can be used, EPAs do not have to be registered to be capable of use.
The onus is on the attorneys to register the EPA when they believe the donor is becoming mentally incapable. A dishonest attorney may ignore the requirement to register and take advantage of their position. The OPG does not have the power to investigate the actions of attorneys acting under an unregistered EPA.
5 -Under an LPA you can choose who to notify on registration
On registering an EPA, your attorneys must notify specified relatives. Due to the complex rules surrounding notification, this often leads to distant family members being told that the donor is losing mental capacity. Consequently, relatives with no involvement might be informed that your attorney is acting and provided with the opportunity to object.
As there are additional safeguards built into LPAs, it is no longer mandatory to notify third parties on registration.
6 – Once your EPA is registered incapacity is assumed
As the registration of an EPA is linked to the existence of mental incapacity, the unsatisfactory result is that once registered you will be considered no longer capable of managing your affairs.
This is at odds with our new understanding of capacity and will impact your continued involvement in your financial affairs.
If you would like to discuss preparing a Lasting Power of Attorney or correcting any of the above, please click here for our contact details. We would be happy to help.
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