The differences between Powers of Attorney explained
Have you made your will? Feel there is a lot of difficult jargon to get your head around?
For example: “Do I need to make a Lasting Power of Attorney if I already have an Enduring Power of Attorney in place?”
Well, Lasting Powers of Attorney (LPAs) came into force in 2007. Prior to this, Enduring Powers of Attorney were used to appoint another to make decisions on their behalf in relation to their property and financial affairs if they no longer had capacity to do so.
“Is an old Enduring Power of Attorney (EPA) still effective?” The simple answer is yes.
However, on closer inspection you may consider that even though your EPA still technically works, it may not give you the same flexibility and benefits as a Lasting Power of Attorney.
The old EPA was extremely rigid, in that you could only either appoint one person to act or appoint several to act together.
The new LPA has much larger flexibility. For instance, in a typical scenario it would be fair to assume that if either spouse became incapable of managing their affairs they would wish for their spouse to be their sole attorney. If, however, your spouse was also in ill health or deceased, then you may wish your children to take over this role. The new LPA allows this by enabling you to appoint replacement attorneys unlike EPAs.
Old EPAs contain various restrictions such as ‘it can be only used for loss of mental capacity’ or ‘can only be used if there is medical evidence to support loss of mental incapacity’. Safeguarding aside, it does create other problems.
For instance, you may still have mental capacity to manage your affairs but you still wish for it to be actioned now.
This is prevalent in cases where a person has become physically unable to manage their affairs, such as being hospitalised for a long period, physical injuries, heart attacks, strokes or frailty of old age.
In these cases if your EPA has a mental capacity restriction it will not be able to be used. If you create an LPA you can choose whether or not you wish for it to be used for a physical incapacity, mental incapacity or both – again there is much more flexibility.
One of the most significant changes brought about the implementation of LPAs rather than EPAs, is that you can now make a separate LPA in relation to health and welfare decisions.
EPAs do not cover these types of decisions at all; an EPA can only be used for decisions regarding property and financial affairs. Therefore, if there are decisions to be made regarding your health and welfare there is no one who has legal authority to do so.
You can now make a separate LPA for these types of decisions. This will allow whoever you appoint to make decisions reading healthcare, treatment and your general welfare , which cannot be done under an EPA.
Our advice? If you do have an EPA already in place you should have it reviewed by a legal professional.