As you enter retirement, you might begin to think about safeguarding your future, and in particular how you might make decisions if you become unwell. The most common decision is to get a power of attorney, but it can be difficult to know the difference between an EPA (Enduring Power of Attorney) and an LPA (Lasting Power of Attorney), and if you should change your existing EPA to and LPA.
Our experts have put together everything you need to know about the difference between EPAs and LPAs and how a power of attorney might benefit you in the future.
What is an Enduring Power of Attorney?
Introduced in 1985, the Enduring Power of Attorney (EPA) is a legal document that appoints one or more people (attorneys) to act on behalf of the donor and manage the person’s financial affairs. Whilst the document can be used once it is signed, if the donor loses mental capacity, the EPA must be registered with the Office of the Public Guardian (OPG) before the attorneys can continue to use it.
Enduring powers were the standard form of power of attorney before Lasting Powers of Attorney (LPAs) were introduced, and any Enduring Power of Attorney created before October 1, 2007, is still legally valid. An EPA can only be created by a mentally capable person.
Decisions that can be made with an EPA
Unlike a Health and Welfare LPA, an EPA does not cover health or welfare decisions. However, with an EPA, your attorney can:
- Manage your money and bank accounts
- Pay bills and collect income on your behalf
- Buy or sell your property
- Handle tax affairs
What is a Lasting Power of Attorney?
Introduced in 2007 to replace the Enduring Power of Attorney, a Lasting Power of Attorney is a legal document that allows someone (the donor) to appoint another person (the attorney) to manage financial affairs or health decisions on their behalf. These lasting powers must be registered immediately to be valid, allowing attorneys to act as soon as registration is complete.
Decisions that can be made with an LPA
Unlike an EPA, there are two types of Lasting Power of Attorney, one document covers property and financial affairs, the other covers health and welfare decisions.
Property and financial affairs LPA
- Manage bills and bank accounts
- Buy or sell property
- Handle Tax Affairs
- Claiming benefits on your behalf
Health and Welfare LPA
- Medical care
- Where you live (including care homes)
- The type of care and support you receive
- Day-to-day routine
Having an LPA in place ensures that your attorneys can manage your own affairs if you lose capacity.
Health and Welfare Decisions
When planning for the future, it’s essential to think beyond just your property and financial matters—your health and welfare decisions are equally important, especially if you lose mental capacity. A Health and Welfare Lasting Power of Attorney (LPA) gives you the peace of mind that, should you become unable to make your own decisions, one or more attorneys you trust will be able to act on your behalf.
A Health and Welfare LPA allows you to appoint attorneys to make crucial decisions about your medical care, daily routine, and living arrangements. This type of LPA only comes into effect if you have lost mental capacity, ensuring that your wishes are respected and your best interests are protected at all times. Unlike an Enduring Power of Attorney (EPA), which only covers property and financial matters, a Health and Welfare LPA is specifically designed to address your personal welfare and health needs.
The Mental Capacity Act 2005 underpins the creation of a Health and Welfare LPA, requiring a Certificate Provider to confirm that you have the mental capacity to make this important decision. Your chosen attorneys have a legal duty to act in your best interests, taking into account your wishes and needs wherever possible.
Health and welfare decisions can include:
- Consenting to or refusing medical treatment
- Deciding where you live, such as moving into a care home
- Making choices about your day-to-day care and support
- Decisions about palliative care
The Public Guardian is responsible for registering and overseeing Health and Welfare LPAs, providing an extra layer of protection for your rights and well-being. By setting up a Health and Welfare LPA, you can be confident that your health and welfare decisions will be made by someone you trust, even if you lose mental capacity in the future.
The key differences between EPAs and LPAs
There are a few key differences to note between Enduring Power of Attorneys and Lasting Power of Attorneys, collectively known as powers of attorney. Both lasting and enduring powers grant specific powers to attorneys, allowing them to make decisions on the donor’s behalf. The legal frameworks for lasting and enduring powers differ: Enduring Powers of Attorney (EPAs) were replaced by Lasting Powers of Attorney (LPAs), with LPAs offering broader options and stricter requirements for registration and use. Donors must carefully decide who to appoint as their attorney and what powers to grant under each document, as these choices determine how decisions will be managed if they lose mental capacity.
Introduction Dates
The first key difference between EPAs and LPAs is the date they were introduced and when they are valid from. All EPAs must have been created before October 2007, this was when LPAs were officially introduced to replace EPAs.
Registration requirements
It is also important to note that for a EPA to be used after the donor has lost capacity, it has be registered. In comparison, LPAs must be registered before they intend to be used, before the donor loses capacity.
An LPA can be registered for immediate effect, allowing attorneys to act as soon as registration is complete. However, an unregistered EPA cannot be used if the donor loses capacity until it is registered.
Document coverage
If you have an EPA, the appointed attorney will only have capacity to make decisions relating to property and financial affairs, in comparison, LPAs have two documents that cover health and welfare decisions and property and financial affairs.
The authority granted by these documents becomes especially important if the donor is losing mental capacity, as this is when the attorney’s powers are activated to protect the donor’s interests.
Some people choose to proceed with just one or both types of the LPA however you have more options in comparison to the EPA.
Flexibility
Whilst both power of attorneys come with strict rules to ensure there is protection in place for the donor, LPAs can offer a bit more flexibility for your future wishes.
Certain actions, such as the registration or revocation of an Enduring Power of Attorney (EPA), depend on whether the donor is considered mentally incapable.
If your attorney needed to be replaced or you wanted to leave specific instructions for your care, you are able to do this with the new LPA.
The duties of an attorney under an EPA or LPA
Whether you have an EPA or LPA, the attorney(s) appointed will still have a legal duty to:
- Act in the donors best interests
- Follow the principles of the Mental Capacity Act 2005
- Keep the donors finances separate from their own
- Avoid any conflict of interest
- Ensure records & documents are accurate and up to date
- Protect the donors assets and interests where possible
- Let the donor and the Office of the Public Guardian (OPG) know if you no longer wish to act as an attorney.
- Give the OPG information about how the LPA is being used, if asked
- Respect the donor’s confidentiality.
If there is no EPA or LPA in place, it may be necessary to apply for a deputyship order from the Court of Protection to manage the donor’s affairs.
Objecting to a power of attorney
Whilst it is not common, sometimes the registration of a power of attorney may need to be objected to. This can be done by telling the Office of the Public Guardian (OPG) and in some cases, the Court of Protection may need to be involved.
There are two types of objection for a power of attorney, factual objections and prescribed objections.
Whilst factual objections to an LPA are based on events or circumstances that have happened, a prescribed objection takes into consideration that the LPA may not be legally correct including fraud and attorneys acting against the interests of the donor.
For more information about objecting to a power of attorney registration, you can visit the Gov.uk website.
Replacing your EPA with an LPA
If you have an existing Enduring Power of Attorney (EPA) and wish to cancel it, you can do so by signing a deed of revocation, provided you still have mental capacity. However, if your EPA has already been registered because you have lost mental capacity, it can only be cancelled with the written permission of the Court of Protection. This highlights the importance of careful planning and understanding the long-term implications before creating an enduring power of attorney.
You also have the option to replace your existing EPA with a Lasting Power of Attorney (LPA) at any time, as long as you have mental capacity. Creating a new LPA allows you to benefit from the additional features and flexibility introduced by the Mental Capacity Act 2005. For example, with an LPA, you can appoint replacement attorneys, giving you greater protection and ensuring your affairs are managed according to your wishes if your original attorney is unable to act.
When considering replacing an EPA with an LPA, it’s important to review the key differences between the two documents, such as the broader scope of authority and the ability to register the LPA immediately. This means your chosen attorneys can act on your behalf under the Property and Financial LPA even if you are still mentally capable, providing more flexibility in managing your affairs.
The process of cancelling or replacing an EPA can be complex, so it’s wise to seek advice from a legal professional to ensure your wishes are properly documented and protected. You can choose to create one or both types of LPA, covering property and financial affairs, and health and welfare, depending on your needs.
By understanding the process of cancellation and replacement, you can make informed decisions to ensure your affairs are managed in line with your wishes, even if you lose mental capacity in the future.
Should you switch your EPA to an LPA?
If you have an existing EPA that was created before October 2007, it will remain valid, however it may be time to consider if you should switch to an LPA.
In some cases, it may be recommended you remain with your existing EPA, however it is important to speak to a Power of Attorney expert to consider your circumstances and future carefully.
You should also think about what would happen if you lose capacity and do not have the appropriate document in place, as this can affect how decisions are made on your behalf.
Key considerations
Before switching to an LPA, you’ll need to take into consideration the key differences listed above. A Health and Welfare LPA can cover decisions relating to your health and welfare, covering a more of your future than your existing EPA which will not allow health or wellbeing decisions to be made.
You may also need to consider what your future will look like if an attorney needs to be replaced as EPAs do not allow this to be done.
Speaking with a Power of Attorney expert can help you reflect on your future, any legal grey areas and what would happen if you lost mental capacity. Read more about switching your EPA to an LPA here.
Chat with a Power of Attorney expert today
At Bower Home Finance, we’re here to help you every step of the way, from advice in later life lending, helping you find the right mortgage for your home, to matching you with one of our specialist partners to ensure your future is covered with wills and Power of Attorneys.
Request a callback today to learn more about how we can help you prepare for the future.
