Until October 2007, it was possible to make an enduring power of attorney (EPA), that allows chosen trusted people (known as your attorneys) to make long term and important decisions on your behalf if you lose mental capacity or become physically incapable of managing your financial affairs for yourself.
EPA replaced by lasting power of attorney (LPA)
The law changed in October 2007 and EPAs were replaced by lasting powers of attorney (LPAs). Unlike EPAs, LPAs are governed by the Mental Capacity Act 2005.
Even though it is no longer possible to make a new EPA, an existing one that was properly executed before October 2007 is still valid if you are happy that the attorneys you chose then remain the ones you want now. In this case, you may not need to take any further action at the moment.
Katie Birch, a private client advisor in our team says:
“If you do have an EPA and you lose mental capacity, your attorneys will need to register the EPA on your behalf with the Office of the Public Guardian (OPG) so that they can continue to act on your behalf. This is not a decision to be taken lightly by your attorneys, as once the EPA has been registered with the OPG, you will not be able to make any further decisions about your own finances.
There are other factors you may wish to consider when deciding whether you wish to keep an existing EPA in place or cancel it an make a new LPA.
If you have an EPA, it gives your attorney the authority to deal with your finances only. No decisions can be made by an attorney appointed under your EPA concerning your health and welfare. LPAs are different as there are two types: one to deal with property & financial affairs and a second to deal with personal welfare issues.”
LPA gives you more choices
Putting an LPA in place means that you can make the following choices whilst you are still able to:
- You can appoint replacement attorneys to act if your primary attorney is not in a position to do so. We can advise you on the choice of appointments and the order in which you wish your attorneys to act.
- You can guide your attorneys to take, or not take, certain actions on your behalf by using our unique document, “The Choices I would Make”, which is available upon request.
- LPAs can be officially registered as soon as all parties involved have signed the document. This means that the personal welfare LPA is ready for use in the event you lose capacity in the future. A property and affairs LPA can be used without you having lost capacity.
- It gives your attorneys the power to invest any funds that you may have held under discretionary management schemes.
- LPAs are policed by the Office of The Public Guardian (OPG) which means that the OPG will randomly spot check the attorneys and ask them to provide evidence of their involvement as an attorney, such as receipts for things they may have purchased on your behalf using your money. The OPG can ensure that the attorneys are acting in your best interests and not abusing their position of trust.
If you would like some more information about making a lasting power of attorney or would like to review your existing EPA, please contact us now. We will make an appointment with one of our private client experts to discuss your concerns. You can also find out more about lasting powers of attorney on our web pages.
Author: Katie Birch, private client advisor.