What is an Enduring Power of Attorney (EPA)?

An Enduring Power of Attorney (EPA) is a legal document that gives someone (known as the ‘attorney’) the authority to manage your property and financial affairs if you become mentally incapable of doing so. While EPAs created before October 1st, 2007, remain valid, they have since been replaced by Lasting Powers of Attorney (LPA) for new cases. If you’re wondering “What is the difference between lasting and enduring power of attorney,” you’re not alone. Many families face crucial decisions about managing their loved ones’ financial affairs through these legal instruments. To navigate these complex matters successfully and ensure your loved ones’ interests are fully protected, we recommend scheduling a consultation with a specialist Power of Attorney solicitor.

Learn exactly how to protect your financial interests and navigate EPA regulations effectively – whether you’re a donor, attorney, or concerned family member.

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Legal framework and validity

Current UK legislation recognizes EPAs as legally binding documents, provided they were properly executed before October 1st, 2007, when the Mental Capacity Act 2005 introduced significant changes.

The validity of an EPA depends on three essential requirements:

• The document must have been signed and witnessed before October 1st, 2007.
• Both the donor and attorney(s) must have been over 18 at the time of signing.
• The donor must have had full mental capacity when creating the EPA.

EPA vs LPA: Understanding the differences

“Do I need a Lasting Power of Attorney if I have an Enduring Power of Attorney” is a recurrent question. Understanding these key differences will help you make an informed decision:

• Scope of powers: While EPAs are restricted solely to handling property and financial matters, LPAs offer broader protection through two separate documents – one for financial decisions and another for health and welfare choices.
• Attorney appointments: EPAs require multiple attorneys to make all decisions jointly, which can cause delays in urgent situations. In contrast, LPAs provide flexibility by allowing attorneys to act either jointly or separately, making decision-making more efficient.
• Implementation requirements: An EPA must wait to be registered until the donor starts losing mental capacity. However, an LPA offers more flexibility as it can be registered immediately after creation, ensuring smoother transition of responsibilities.

EPA and other types of Power of Attorney

Understanding where EPAs fit within the broader framework of UK Power of Attorney options helps determine which legal instrument best suits your needs:

• General Power of Attorney: A short-term solution for mentally capable individuals needing temporary assistance with financial matters. Often used during extended travel or specific business transactions. Becomes invalid if mental capacity is lost.
• Court of Protection Deputyship: The last-resort option when someone has lost mental capacity without any pre-existing power of attorney. Involves a lengthy court application process, higher costs, and ongoing supervision.
• Ordinary Power of Attorney: Provides immediate but temporary authority for specific tasks or time periods. Automatically ceases if mental capacity is lost, making it unsuitable for long-term planning.

Setting up and registering Powers of Attorney

Important: New EPAs cannot be created since October 1st, 2007. If you need to set up a Power of Attorney today, you must create an LPA instead.

Here’s what you need to know:

For existing EPAs

If you have a valid EPA created before October 2007, you can still register it when needed. When “registering an Enduring Power of Attorney,” the process requires several essential steps:

• First, the attorney must notify both the donor and three relatives about the intention to register.
• Following this, they need to complete two crucial forms: the EP1 for notice and EP1PG for registration.
• A statutory waiting period of five weeks must then be observed before proceeding.
• Once this period expires, the attorney can submit the application to the Office of Public Guardian along with the £82 registration fee.
• If the donor’s mental capacity is declining, medical evidence must be provided to support the registration application.

Creating a new LPA

If you need to set up a power of attorney now, you must create an LPA:

• The process begins with deciding whether you need a Property & Financial Affairs LPA, a Health & Welfare LPA, or both types for comprehensive protection.
• You’ll then need to complete the appropriate forms – LP1F for financial decisions or LP1H for health decisions.
• A certificate provider must confirm your mental capacity as part of the process.
• Your chosen attorney(s) will need to sign the documents, confirming their willingness to act.
• Finally, you must register the LPA(s) with the Office of Public Guardian, paying the current fee of £82 for each type of LPA.

Converting from EPA to LPA

If you have an existing EPA and still have mental capacity, you may want to consider setting up an LPA alongside it for broader protection. This process isn’t technically a conversion, but rather running both systems in parallel.

• Your existing EPA can continue to cover financial matters, while you can create a new Health & Welfare LPA to address medical and care decisions that your EPA cannot cover.
• If desired, you can also set up a Property & Financial Affairs LPA alongside your EPA for additional protection.
• Both documents can run concurrently, with your EPA remaining valid until you choose to cancel it.
• The process requires completing new LPA forms and registration with the Office of Public Guardian, while keeping your EPA in place.

Termination and cancellation of an EPA

Whether registered or not, an EPA can end in several ways, and attorneys must understand their responsibilities during termination.

• Circumstances for termination: An EPA automatically ends if the donor or attorney dies, the attorney loses mental capacity, either party becomes bankrupt, or the donor and attorney divorce. For joint attorneys, if one cannot continue, the entire arrangement may need review.
• Cancellation process: The process differs based on registration status. A mentally capable donor can revoke an unregistered EPA, while cancelling a registered EPA requires court approval. In either case, a formal deed of revocation must be prepared, all parties notified, and financial institutions informed of the change.
• Death of donor implications: When a donor dies, the attorney’s powers cease immediately. The attorney must return the original EPA to the Office of Public Guardian, prepare final accounts, and transfer all records to the estate’s executors or administrators. They cannot make any further financial decisions, as authority transfers to the executor named in the will or estate administrator.

Do I need a lawyer for an Enduring Power of Attorney (EPA)?

Professional legal guidance provides crucial protection for both donors and attorneys when dealing with EPAs. While some may hesitate due to costs, the complexity of Power of Attorney matters often justifies professional assistance, particularly given the interaction between EPAs and newer LPA regulations.

• When legal advice is essential: Complex situations like EPA registration, disputes between attorneys or family members, and concerns about financial abuse require professional guidance. Legal help is particularly valuable when considering converting from an EPA to LPA, or when attorneys need clarity about their powers and limitations.
• Choosing the right professional: Look for a solicitor who specializes in power of attorney matters and belongs to the Solicitors for the Elderly network. They should demonstrate both expertise in elderly client care and clear communication skills. Local accessibility for meetings can prove invaluable, especially for elderly donors.
• Understanding costs and value: Initial consultation fees vary between firms, with EPA registration assistance typically costing between £300-£600. While complex cases may cost more, many firms offer fixed-fee packages, and legal aid might be available.

FAQs

1. What are the disadvantages of Enduring Power of Attorney? EPAs are limited to financial decisions only and offer less flexibility than LPAs. Multiple attorneys must act jointly, which can delay urgent decisions. EPAs cannot be modified once created.
2. Is an LPA better than an EPA? LPAs offer broader protection by covering both financial and health decisions, greater flexibility in attorney appointments, and more safeguards. However, a valid EPA remains legally effective and doesn’t need replacement unless broader powers are desired.
3. What does an Enduring Power of Attorney cover? EPAs only cover property and financial decisions, such as managing bank accounts, paying bills, and handling investments. They do not cover health or welfare decisions.
4. Does an Enduring power of Attorney carry on after death? An EPA automatically terminates upon the donor’s death. Authority then passes to the executors named in the will or administrators of the estate.
5. What can an EPA not do? An EPA attorney cannot make decisions about healthcare or welfare, make changes to the donor’s will, make large gifts from the donor’s estate, delegate powers to another person, or continue after the donor’s death.
6. Does Enduring Power of Attorney need to be registered? Registration is only mandatory when the donor starts losing mental capacity. While the donor has full capacity, an unregistered EPA can be used with their permission.

While Enduring Powers of Attorney created before October 2007 remain valid, their limitations highlight the need for careful consideration of additional protection. Whether maintaining an EPA or supplementing it with an LPA, seeking professional legal advice ensures comprehensive future protection.

Get legal help with Your Power of Attorney!

Don’t wait until mental capacity becomes an issue! Qredible’s network of specialist Power of Attorney solicitors can help protect your interests, whether you have an existing EPA or need advice on creating new LPAs.

KEY TAKEAWAYS:

• Enduring Powers of Attorney created before October 2007 remain valid but can no longer be created, as they have been replaced by Lasting Powers of Attorney.
• EPAs only cover financial and property decisions, while modern LPAs offer broader protection including health and welfare choices.
• Registration of an EPA becomes mandatory when the donor begins to lose mental capacity, requiring notification of relatives and a five-week waiting period.
• Existing EPA holders should consider supplementing with an LPA for comprehensive protection while retaining mental capacity.