- The Ministry of Justice and Office of the Public Guardian have issued their consultation response on modernising the lasting power of attorney (LPA) process.
- The consultation looks at how to make the process more efficient while maintaining safeguards.
- Areas looked at include how to improve the witnessing process, how to improve processes around third parties accepting LPAs as well as issues around who can log objections and how they are dealt with.
- The response rejected introducing an urgent service on the basis it may slow down the service more generally. It also committed to maintain a paper channel for those who prefer to use it.
- It also rejected the idea of merging Financial and Health LPAs but said it would look at how to reduce duplication of data where both are in place.
Modernising Lasting Powers of Attorney consultation response can be found here Modernising Lasting Powers of Attorney – GOV.UK (www.gov.uk)
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:
“Lasting Powers of Attorney (LPAs) are vital in making sure your affairs are handled should there be a time when you are unable to make decisions for yourself. However, the process for making and registering an LPA is complex and time consuming and it is easy to make mistakes. Even when an LPA is registered attorneys can be frustrated by different approaches adopted by third parties such as banks and there is confusion around how to lodge complaints if you have concerns.
The consultation needs to tread the tricky balance between how to develop an LPA process fit for the modern age while maintaining safeguards protecting loved ones from abuse and coercion. Under the proposals an LPA can be made totally online for the first time though the government remains committed to keeping the paper route open to those who need it. The response recommends identity checks before the registration of an LPA to improve security and is considering whether they should be registered as soon as executed to cut down instances where there are problems with the LPA, but the donor has lost mental capacity.
We’ve seen the number of LPAs skyrocket in recent years, but it remains an issue that many people are unwilling to discuss. According to recent HL research only 13% of people have an LPA in place. This includes only 10% of those aged 55-64 though this increases to one in five (22%) of those aged 65-74. Accidents or periods of ill-health mean younger people may also need LPAs so it is something that should be on everyone’s radar.
However, people put these decisions off and risk financial chaos by not having documents such as an LPA in place. This means no-one can step in should a loved one lose track of how they are managing their finances or stop a scammer from manipulating a vulnerable person to get their hands on their cash. In the worst-case scenarios family may be forced to apply to the Court of Protection for a deputyship order which can be both time-consuming and costly.
An LPA allows you to nominate one or more people to manage your finances or wellbeing decisions if you are unable to yourself. You can fill out and submit a form online or in paper. It costs around £82. It can take up to 20 weeks to register with the Office of the Public Guardian.
People have concerns that LPAs mean you immediately give up control of your finances, but this is not the case. You must have mental capacity to set up an LPA and it can only be acted on with your permission in the case of a financial LPA or when you lack mental capacity to make your own decisions. You can cancel an LPA if you feel you no longer need it or remake one if your needs change or you want to appoint someone else.
Dementia largely affects older people but can happen to younger people too so it’s a good idea not to put it off. There are other situations that may lead to the need for an LPA too such as periods of ill health or in case of an accident.
It’s worth taking the time to think about who you would like to be your attorney and ask them if they are comfortable taking on the responsibility. It can be a good idea to have more than one attorney as they have oversight of what the other one is doing, and you can set it up so that they can take decisions individually or only on a joint basis.
When planning for an LPA it can also be a good idea to put together a list of key financial contacts which will tell your attorneys important information such as who you bank with and who your utility suppliers are. This information often isn’t shared in advance and can cause a lot of problems when the time comes to put the LPA into force. It may be a difficult issue to think about but taking the time to consider these things now will bring you and your family real peace of mind.”
Important things to think about
- When do you draw up an LPA? Dementia usually affects older people but it’s worth thinking about an LPA earlier than retirement age. It’s often a good idea to draw up an LPA at the same time as you sort out your Will.
- Who do you want to be your attorney? It could be a relative, friend, spouse or civil partner. A professional such as a solicitor can act as an attorney. They need to be over the age of 18 and have mental capacity to make their own decisions.
- Are they the right person for the job? Just because someone is a close friend or family member doesn’t mean they should be your attorney. Think about how they manage their own affairs, do you trust them to make the right decisions on your behalf? Are they comfortable doing what you have asked them to do – some people would not want to assume such a burden.
- How should they make decisions? If you have more than one attorney, they can either make decisions individually or jointly.
- What’s the alternative? If you lose mental capacity your loved ones may need to apply to the Court of Protection for a deputyship order to take control of your affairs. This is much more expensive than an LPA and the requirements are more onerous with the deputy needing to submit an annual report of what they’ve done.