Should you Replace your Enduring Power of Attorney?
Posted on 6th July 2022 at 13:22
Enduring Powers of Attorney (EPAs) are old form powers of attorney pre-2007. Lasting Powers of Attorney (LPAs) were introduced on 1st October 2007 and after this date, it was not possible to create EPAs.
Is your EPA still valid?
Yes, even after the introduction of LPAs, any EPAs created before 1st October 2007 still continue to be valid.
However, the LPA has a number of advantages over the EPA. Whether these would be advantageous to you is likely to depend upon your situation. You should consider whether your existing documents are still fit for purpose; your circumstances may have changed since you created your EPA.
You must have the requisite mental capacity to put LPAs in place, so you should seek to put these in place sooner rather than later.
Key differences between EPAs and LPAs
• Only covers Property & Financial decisions;
• Can be used without registration but must be
registered upon loss of capacity;
• New EPAs can no longer be created.
Can cover both Property & Financial decisions and/or Health & Welfare decisions;
Must be registered before it can be used;
LPAs can still be created.
The Advantages of LPAs
Health & Welfare Decisions
The most obvious advantage is the ability to make decisions in regard to Health & Welfare. Previously, the EPA would only allow attorneys to make decisions in relation to Property & Finances but with LPAs comes the ability to make decisions such as:
• Where you may live;
• Consenting to, or refusing, medical treatment; and
• Care home arrangements.
These types of decisions can only be made after the person granting the LPA has lost their mental capacity.
If you have an EPA in place and you lose capacity, then decisions about Health & Welfare will not be made by loved ones, or your appointed attorneys. They will be made instead by professional bodies, such as your Local Authority.
Timing of Registration
LPAs are normally registered once they have been signed, as they cannot be used until they have been registered.
EPAs are only registered if the donor loses mental capacity. When this happens, attorneys can no longer use their powers under the EPA until it has been registered. This often results in a lengthy delay at a time at a time when the attorney’s powers are needed most.
LPAs are often registered immediately so that they are ready for use whenever they are needed. If the donor later loses mental capacity, their attorneys can continue making decisions for them without any disruption or delay.
Unfortunately, as EPAs do not need to be registered immediately, in many cases these important documents can become mislaid or lost. With LPAs, as they are usually registered immediately, this is not an issue.
Less Potential for Failure
There are a few ways in which EPAs are more prone to failure than a well-drafted LPA:
• Jointly-appointed attorneys: If your EPA appoints multiple attorneys to act ‘jointly’ then if one of the attorneys is unable to act the EPA will cease immediately. LPAs allow you to appoint attorneys ‘jointly & severally’ meaning they can still be used if one of the attorneys is unable to act.
• Bankruptcy: An EPA will be revoked automatically if either you or your attorney(s) are declared bankrupt.
The main issue with an EPA is that you may only discover these problems when trying to register it. If the EPA is found to be invalid, then the donor is unlikely to have the capacity required to make a new LPA.
Acceptance by third parties
Many clients or their attorneys report that they struggle to have EPAs registered by third parties such as banks or other financial institutions. As EPAs were replaced in 2007, many financial houses or their staff have not seen or had experience with EPAs and therefore refuse to register these documents, despite their legal status.
For ease, it is recommend that in some cases, EPAs are replaced with LPAs which a much more readily accepted by banks and other third party institutions.
Greater Protection Against Abuse
Granting any power of attorney involves placing trust in the people you appoint. If that trust is betrayed, it can be deeply upsetting and financially damaging.
LPAs offer some increased protection against attorneys abusing their powers. LPAs cannot be used until they have been registered with the Office of The Public Guardian (OPG). This means that there are records of all LPAs which are currently in operation and if any problems arise you can contact the OPG for help.
EPAs, on the other hand, can often be used without being registered, as long as the person who granted the EPA still has mental capacity. This means that many EPAs are used without any oversight or involvement from the OPG and they can only take action against attorney who abuse their powers if the EPA has been registered.
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