The main difference between PoA (Power of Attorney) and LPA (Lasting Power of Attorney) lies in their duration and scope:
- Duration:
- Power of Attorney (PoA): A Power of Attorney is a legal document that grants one person (the agent or attorney-in-fact) the authority to act on behalf of another person (the principal) for a specific period or particular transaction. The authority granted under a PoA generally ceases when the principal becomes mentally incapacitated or passes away.
- Lasting Power of Attorney (LPA): An LPA is also a legal document that allows one person (the attorney) to make decisions and act on behalf of another person (the donor), but it is intended to last even after the donor becomes mentally incapable. The LPA only becomes effective once it is registered with the relevant government authority, and it remains in force during the donor’s incapacity or until the donor decides to revoke it.
- Scope:
- Power of Attorney (PoA): A PoA can be general or specific in scope. It may grant the agent broad powers to handle a range of financial and legal matters or restrict them to specific transactions or responsibilities.
- Lasting Power of Attorney (LPA): An LPA, on the other hand, is more comprehensive in scope. It typically covers a broader range of decisions, including financial matters, personal welfare, and healthcare decisions, depending on the type of LPA executed. The LPA can encompass decisions about the donor’s property, finances, healthcare, and personal welfare.
- Mental Capacity:
- Power of Attorney (PoA): A PoA becomes invalid if the principal becomes mentally incapacitated. It is suitable for situations where the principal wants someone else to act on their behalf for a limited period or a specific purpose, but not if they lose the ability to make decisions independently.
- Lasting Power of Attorney (LPA): The key feature of an LPA is its “lasting” nature, meaning it continues to be effective even after the donor becomes mentally incapacitated. This makes it particularly useful for individuals who want to plan ahead for potential future incapacity and appoint someone they trust to manage their affairs.
In summary, a Power of Attorney (PoA) is typically used for short-term or specific transactions and ceases when the principal becomes incapacitated, while a Lasting Power of Attorney (LPA) is designed to endure and remain effective during the donor’s incapacity, making it a suitable tool for long-term planning and decision-making.