Continue More info

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies

   

Latest News

Residence Nil Rate Band (RNRB).

A new tax-free allowance was announced in the Summer Budget 2015 (the Residence Nil Rate Band) that will take effect on or after 6th April 2017.  Downsizing provisions have yet to be finalised.

There are a lot of myths and misconceptions surrounding this new allowance - please call or view our website pages (not yet updated) for further information - including:

  • everyone has a new allowance of £1M;
  • everyone can pass their home free of tax to their children

You may not get the full allowance (or double the allowance) if:

  1. your estate exceeds £2M
  2. you rent property
  3. you don't leave your property (or proceeds of sale) to the right qualifying people and in the right manner
  4. you are unmarried

WATCH THIS SPACE!

Comparison between Enduring and Lasting Power of Attorney (EPA/LPA)

The key differences between EPAs and LPAs

Prior to the Mental Capaity Act 2005 and its enactment in October 2007 you could appoint someone to manage your financial affairs through an instrument known as the Enduring Power of Attorney (EPA).  From 1st October 2007 the EPA was replaced with the Lasting Power of Attorney (LPA).

The following sections summarise the key differences between the two documents.

Making EPAs and LPAs

EPA

  • Must be set out in the legally required format and signed by parties before 1st October 2007.

  • Can no longer change or make a new EPA, but existing ones are still valid.

LPA

  • Must be set out in the legally required format.

  • Has a 'certificate' section that must be completed by an independent person to confirm that you as the donor (the person making the LPA) understands and is not under pressure.

  • Can contain the names of anyone the donor wants to be notified on registration of the LPA. If there is no one to be notified, you must have a second certificate provider.

The types of EPAs and LPAs

EPA

There is only ONE type of EPA:  You appoint Attorney(s) to take care of your property and affairs.  

LPA

There are TWO types of LPA: 

  • The 'Property and Financial Affairs' LPA - You appoint Attorney(s) to take care of your property and affairs. This effectively replaces the old EPA.

  • The 'Health & Welfare' LPA - You appoint Attorney(s) (which can be different to the attorneys for Property & Financial Affairs) to take care of your personal welfare and healthcare.  It can be said to replace the 'Living Will'. 

If your Attorney(s) are unable to Act

EPA

If you appoint your Attorneys to act 'Jointly' and just one of them is unable to act - The EPA ceases immediately.  You cannot appoint replacement Attorneys.

LPA

You can appoint Replacement Attorneys when you create the LPA - ensuring that the LPA continues to be valid. 

Decisions the Attorney(s) can make

EPA

Unless you put limitations on the EPA, the Attorney(s) can make exactly the same types of decision about your property and financial affairs as you can when you have the mental capacity to do so.  But the Attorney(s) cannot make decisions about your personal welfare.

LPA

Depending on the type of LPA you as a donor make and any limitations you include, your Attorney(s) can make decisions about your:

  • Property and financial Affairs and/or

  • Personal Welfare (including giving or refusing consent to treatment).  Your Attorney(s) will only be able to make health and welfare decisions for you if you lose the capacity to do this for yourself.

When the instrument comes into operation

EPA

Would have come into operation as soon as it had been completed and signed by you, your Attorney(s) and the witnesses, unless you put in a limitation to say that the EPA will not come in to operation until you lose mental capacity or that it will start from a future specified date.

If you lose mental capacity, your Attorney(s) must register your EPA to be able to use it.

LPA

The LPA can be registered with the Public Guardian at any time, but your Attorney(s) cannot act under an LPA unless it is registered with the Public Guardian.  Then your Attorney(s) can make any decisions provided that you cannot make the required decision for yourself. 

The duty of the Attorney(s)

EPA

Your Attorney(s) have a duty to register the EPA if they believe that you have lost or are losing mental capacity.  Your Attorney(s) have only a common law duty to act in your best interests.

LPA

Your Attorney(s) under an LPA have a statutory duty to act in your best interests and must follow the guidelines set out in the Mental Capacity Act Code of Practice. 

The donor’s ability to make decisions

EPA

Until your EPA is registered, both you and Attorney(s)(s) have authority to make decisions about your property and financial affairs. After registration, you can still make decisions if you are able.

LPA

You can carry on making decisions after registration, provided you have the capacity to do so.

Registering the power

EPA

Your Attorney(s) have a duty to register the EPA if they believe that you have lost or are losing mental capacity. You cannot register the EPA yourself.

Before applying to the Court, the Attorneys must give written notice of the application to you as the donor, any co-Attorneys and at least three of your closest relatives.  All relatives within a category must be notified - whether estranged or not.  Anybody notified can object to the registration.

LPA

Either you as donor, or your Attorney(s) can apply to the Public Guardian to register your LPA.  The application can be made at any time after the LPA has been executed (i.e. signed and witnessed by all parties).  On registering the LPA, the persons named by you as the person(s) to notify must be sent notification of the application.

Your relatives will not be automatically notified of the application to register the LPA unless named as being persons who should be given notice.  Additionally, you as the donor and other Attorney(s) can object to the LPA being registered.

Cancelling the power

EPA

As long as you have the mental capacity to do so, as the donor you can revoke or cancel an unregistered EPA at any time without the need to make an application to the Court of Protection

The Court of Protection must confirm any revocation or cancellation of a registered EPA and you as the donor you will need to satisfy the Court that you understand who the attorney(s) are and the powers you have given them.  You will also need to show the Court that you understand the effect that cancellation will have and why the EPA needs to be cancelled.

An EPA registered or unregistered is revoked if you or the attorney(s) are made bankrupt.

LPA

As the donor you can revoke or cancel your LPA as long as you have the mental capacity to do so.  If there is any dispute about whether your LPA has been cancelled or ended, the Court of Protection has the authority to make a decision.

If your attorney is your spouse or civil partner, the dissolution or annulment of a marriage or a civil partnership will end their appointment or revoke the power, unless you have specifically stated otherwise in your LPA. A Property and Financial Affairs LPA is revoked if you or the attorney(s) are made bankrupt, but bankruptcy does not terminate a Health & Welfare LPA.