We regularly receive enquiries from attorneys who are not sure whether or not they should register an Enduring Power of Attorney (EPA).
What is and EPA?
An EPA is a legal document made on or before 30th September 2007. The person making the EPA (the donor) could appoint one or more people of their own choosing (their attorney(s)) to make decisions about financial affairs and property on their behalf.
What is the difference between an EPA and a Lasting Power of Attorney (LPA)?
A Property & Financial Affairs LPA will have been made on or after 1st October 2007. In many ways a Property & Financial Affairs LPA is similar to an EPA but a key difference lies in when an EPA (as opposed to an LPA) should be registered with the Office of the Public Guardian (OPG).
Provided that the donor of an EPA hasn’t included a restriction saying that the EPA can only be used when they have lost mental capacity, the EPA can be used by the attorney(s) without it being registered with the OPG, for as long as the donor has the mental capacity to manage their property and financial affairs.
What happens if the donor of an EPA loses, or starts to lose, the mental capacity to manage their property and financial affairs?
At this point the attorney(s) have a duty to register the EPA with the OPG, and the EPA cannot be used at all until the application to register has been made.
Once the application to register has been made, an attorney has limited powers as follows:
- To maintain the donor;
- To maintain himself or herself or any other person if the donor might be expected to provide for the person’s needs; and
- To prevent loss to the donor’s estate.
Example – Tony and Penny
Tony has made an EPA appointing his daughter Penny as his attorney. His son, Eddie, lives with him and Bill supports him financially, paying for his food and household bills. Tony has been diagnosed with Alzheimer’s disease and has reached the point where he can no longer deal with his finances himself. The EPA has not been registered and Penny needs to access his bank accounts to buy food and pay essential bills for Tony and Eddie. She is also concerned because the value of one of Tony’s shareholdings is falling and she needs to sell the shares as soon as possible.
Penny cannot use the EPA at all until she has applied to register the EPA. However, once she has lodged the application Penny can use the EPA to maintain Tony and Eddie. She can also sell the shares before they fall further in value to prevent loss to Tony’s estate.
What happens when the EPA has been registered?
Once the EPA has been registered, the attorney(s) have full use of it again. So in the example given, Penny will once again have full powers to act as Tony’s attorney.
So when does a Property & Financial Affairs LPA need to be registered?
The regimes applying to the registration of EPAs and LPAs are very different. An LPA can not be used at all until it has been registered. Registration can take place regardless of whether the donor has experienced any loss of mental capacity.
Please do not hesitate to contact a member of the private client team on if you have any questions, or would like us to assist with an application to register either an EPA or an LPA.