What is an Enduring Power of Attorney and do I need one if I have a Lasting Power of Attorney?
What is an Enduring Power of Attorney and do I need a Lasting Power of Attorney if I have an Enduring Power of Attorney are questions I’m often asked and will address through this blog. To answer the questions, it will help to understand what each is, how they are set up and when each can be used.
What is an Enduring Power of Attorney?
An Enduring Power if Attorney is a legal document which enables a person (called an attorney) to make a decision related to financial matters for another person (called the donor). If the donor loses mental capacity, the Enduring Power of Attorney must be registered with the Office of the Public Guardian.
To register an Enduring Power of Attorney download and fill in the form EP1PG and send to the:
• donor
• at least three of the donor’s family who are eligible – they must be 18 or over and have mental capacity.
• Any attorneys were appointed jointly and severally but are not applying to register the Enduring Power of Attorney.
You can find out more about the process from GOV.UK
Once the correct people have been officially told, the Enduring Power of Attorney will need registration. To do this complete and send an application form called EP2PG to the Office of the Public Guardian along with an application fee of £82.00 (unless exemption or remission applies).
Current information states it will take eight to ten weeks, if there are no objections, to register the Enduring Power of Attorney. My feeling is the waiting time could replicate the Lasting Power of Attorney waiting time which is currently around twenty weeks.
How do you set up an Enduring Power of Attorney?
You cannot set up a new Enduring Power of Attorney, however you can register an existing Enduring Power of Attorney. Only Enduring Power of Attorneys made and signed before 1st October 2007 can still be used, after this date a Lasting Power of Attorney must be set up instead.
What is a lasing Power of Attorney?
A Lasting Power of Attorney is a legal document set up to allow a person (called a donor) to nominate another person or people (called attorneys) to make decisions on their behalf. There are two different types of Lasting Power of Attorney, one for Health and Welfare and one for Property and Finance. The Health and Welfare Lasting Power of Attorney can only be used once a donor has lost capacity whereas the Property and Finance Lasting Power of Attorney can be used, with the donor’s consent, as soon as it is registered.
For the purposes of this blog I’m referring only to the Property and Finance Lasting Power of Attorney.
How do you set up a Lasting Power of Attorney?
To set up a lasting Power of Attorney you need to complete LP1F , you can complete the form by hand or on-line (I always complete on-line[i] as there is less room for error and you can track the progress of an LPA electronically). Once complete, you will need to register the Lasting Power of Attorney with the Office of the Public Guardian. This is currently taking around twenty weeks as long as there are no issues with the application. You can read in more detail about how to set up a Lasting Power of Attorney here .
It costs £82.00 to register a Lasting Power of Attorney but remission and exemptions are available.
Why were Lasting Powers of Attorney introduced?
Lasting Powers of Attorney were introduced on 1st October 2007 through the Mental Capacity Act. They replaced Enduring Power of Attorney which applied only to financial matters.
When can a Lasting Power of Attorney be used and when can an Enduring Power of Attorney be used?
A Lasting Power of Attorney can be used, with the donor’s consent, as soon as it is registered or it can be set up to be used only on loss of capacity.
An Enduring Power of Attorney can be used when it is set up. Once the donor has lost, (or started to lose), mental capacity the Enduring Power of Attorney must be registered before it can be used or, if it’s already in use, before it can continue to be used.
The key difference is the wait time, the Lasting Power of Attorney takes effect as soon as a person loses capacity, there is no delay[ii].
Do I need a lasting Power of Attorney if I have an enduring Power of Attorney?
Now I’ve explained the formal bits the next section is based on my experience and thoughts. My default position will always be it’s better to be prepared; with this a Lasting Power of Attorney provides the immediate authority for an attorney to act. We can never predict when capacity might be lost through sudden accident or longer-term health condition, at that point of crisis it may be extremely challenging to have to wait for authority to step into role of attorney.
The Lasting Power of Attorney gives a further advantage of the ability to take effect, with the donor’s permission, as soon as it’s registered. This can be a great help if a donor cannot undertake financial duties for a reason like hospital admission or to go to a bank due to physical health issues.
In exploring the question of Enduring Power of Attorney verses Lasting Power of Attorney for a client, the issue of whether there is an expiry on an Enduring Power of Attorney was raised. I contacted the Office of the Public Guardian to find out if there was a time limit on when a created Enduring Power of Attorney could be registered and was informed there is not.
Although an Enduring Power of Attorney won’t expire legally, a donor’s wishes may change or different attorneys could be wanted. In other words, whilst the Enduring Power of attorney may be valid it may be longer be appropriate. I’ve mentioned already that from 2007 it’s not been possible to create an Enduring Power of Attorney, that’s nearly sixteen years ago. If the attorneys appointed sixteen years ago are no longer appropriate (or alive), that could be a trigger to make a lasting Power of Attorney.
Cancelling Enduring Power of Attorney
There are strict rules on cancelling an Enduring Power of Attorney and I’ll cover in another blog.
The advantages of a lasting Power of Attorney
• There is no delay period to register once a person loses capacity
• It can be used, as soon as it’s set up
• There is a clear distinction between Property and Finance and Health and Welfare
• Current and appropriate attorney(s) can be chosen
Call to action
If you have an old Enduring Power of Attorney which has yet to be registered my suggestion would be to replace it with a lasting Power of Attorney for the reasons I have outlined. The registration costs are the same but, in my view, the benefits of a Lasting Power of Attorney outweigh the benefits of an unregistered Enduring Power of Attorney.
[i] Even if you complete the forms on-line you will need to print for signing and send the hard copies to the Office of the Public Guardian.
[ii] I have already mentioned that there is an option for the Property and Finance Lasting Power of Attorney (Property & Finance) to take effect, with the donor’s consent, as soon as it’s registered.