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Getting a Good Grasp of Two Types of Power of Attorney

Getting a Good Grasp of Two Types of Power of Attorney

We all know what a Power of Attorney is; someone appointed by you to look after your affairs should you become unable to do so, although sometimes you may want to appoint someone to do something on your behalf, because you are out of the country or you just would prefer someone else to do it! This article discusses two types of Power of Attorney – useful for CII AF1, AF5, J02, R01, R05 or R06 exam revision.

Enduring Power of Attorney

Under the old pre-2007 regime, we had an Enduring Power of Attorney (EPA).  It was a fairly simple process to set one up, and lots of people at the time were encouraged to ‘get in quick’ before they were no longer available in October of that year.  (Although they were simpler, they didn’t have any of the protection that was later put in place with Lasting Power of Attorney ).

If the person subsequently lost capacity, then the attorney had to register the EPA with the Office of the Public Guardian, and once registered, they could deal with that person’s affairs.

It’s not possible to make any changes to an existing EPA or make a new one, but you can still of course register one should you become mentally incapacitated.

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Lasting Power of Attorney

Following the Mental Capacity Act 2005, which came into effect on the 1st October 2007, the Lasting Power of Attorney (LPA) was introduced.

A different process exists with the LPA, in that you now have to register it with the Court even if the person still has mental capacity. There must also be a certificate from prescribed people who can confirm that the person understands the LPA, and there has been no undue pressure put on them.  In other words, it acts as a safety net for those people who can be vulnerable.

With an LPA, there are two types of power. The first one is like the old EPA, a property and financial affairs LPA , which is self-explanatory; the attorney looks after the person’s finances.

The second one is a health and welfare LPA, which allows the attorney to make decisions on behalf of that person regarding their welfare, such as where they might live to allowing or refusing medical treatment.  A personal welfare LPA can only be used once it’s been registered, and the person has become mentally incapable of making those decisions themselves.

According to the Alzheimer’s Society, there are over 700,000 people with dementia in England, with this figure expected to increase to around 850,000 by 2021.  They also report that it doesn’t just affect older people; over 40,000 people under 65 in the UK are also living with this disease.  With the most simple of tasks becoming virtually impossible to do, it seems that planning ahead to get a Power of Attorney in place is not a bad idea for all of us.

It’s a good idea to have a good grasp of what both an EPA is and an LPA, as they are often tested in the relevant exams.

Grab the resources you need!

If you’re studying for your CII R01 exam, and you’re a bit worried about exam day, grab our free taster to try out one of Brand Financial Training’s resources for yourself.  Click the link to download the R01 mock paper taster now!

Click here to download our free taster mock paper for CII R01


Alternatively, you can download the taster for AF1AF5J02, R05 or R06 if you’re studying for one of those exams.

Over to You…

Have you had any experience of putting a POA in place?