Do I need a Lasting Power of Attorney if I have an Enduring Power of Attorney?
A client specifically requested this blog to help him to understand whether his mother should make a new Health & Welfare Lasting Power of Attorney to supplement her existing Enduring Power of Attorney. It is quite confusing to understand the interplay between these documents so here is a summary:
Many people have made Enduring Powers of Attorney (“EPAs”) which are documents under which you appoint a trusted person to act as your Attorney. EPAs were basically created because the Government knew that we have an elderly population and there was an increasing need for people to have a means to appoint someone they trusted to look after their financial affairs when they got older and began to get confused.
However, the EPAs were very basic and as there were no safeguards in the registration process; people could easily be misled by fraudsters into signing documents without really appreciating their effect. The Government therefore in 2003 replaced EPAs with Lasting Powers of Attorney (“LPAs”). If you have already made an EPA you can still register it, but no new EPAs can be made.
Losing Mental Capacity
EPAs are registered when the Donor is or is becoming mentally incapable of managing their affairs. So an EPA can’t be used when someone simply can’t get to the bank because they have a broken leg – that is a mobility and not a capacity issue.
With EPAs it is a black and white matter – whilst you have capacity, you can access your accounts. When you no longer have capacity – the EPA is registered – and then your Attorney can access your accounts and you can’t.
Some people get by with their existing EPA by ignoring the condition that the EPA was only to be registered when someone was “becoming mentally incapable” of managing their own affairs and register the document prematurely. This can cause problems when the Donor then wishes to access their own accounts again (for example, when their broken leg recovers).
LPAs are different because there is no requirement to wait until the person is losing mental capacity before the LPA is registered. So if a Donor were to break their leg; their Attorney could go to the bank on their behalf. In this way the LPA is much more flexible.
Health & Welfare Decisions
EPAs only cover your property and financial affairs. Therefore if you have an Attorney appointed under an EPA they will not be able to act on your behalf when making decisions such as what medical treatments you should receive or in which care home you should live.
Again, when designing the new LPAs the government decided this was insufficient and so LPAs come in two varieties: one for Property and Financial Affairs and a second for Health and Welfare. You can have the same or different Attorneys appointed.
Due to a recent change in legislation, many care and nursing homes now insist on clients having an attorney appointed under a Health & Welfare LPA as they require someone to sign the care plan when the client is no longer able to do so. I have received many reports from clients over the last few months that families in the Poole and Bournemouth area have been asked by care staff to look into appointing an Attorney under an LPA to supplement the existing EPA.
In conclusion an EPA alone is sometimes not sufficient and it is well worth considering whether to make an LPA to supplement an existing EPA.
Bear in mind that you can only make an LPA whilst you have mental capacity. However the EPA is registered when you no longer have capacity or you are losing capacity. Therefore the timing of creating and registering these documents is quite a tactful affair. You need to consider whether you require an LPA and put it in place before it gets too late and you have to register the EPA.
If you have any questions you can contact our Private Client lawyers at the offices below:
Canford Cliffs, Poole: 01202 709898
Ringwood: 01425 484848
Swanage: 01929 422233