Flora’s article was published in EPrivateClient, 6 February 2023, and can be found here.
Lasting Powers of Attorney – a newly modernised system
With life expectancy and dementia on the rise, lasting powers of attorney (‘LPAs’) are becoming increasingly more important. However, with the ever-growing demand for digital services, it is key that the LPA system can keep up in order to continue to meet peoples’ needs.
LPAs – what are they?
An LPA is a legal document which allows an individual (the ‘donor’) to appoint one or more trusted people (known as the ‘attorneys’) to manage their affairs and make decisions on their behalf if they lose mental capacity. It is only effective once it has been registered with the Office of the Public Guardian (the ‘OPG’). There are two types of LPA:
- Financial LPA – this allows the attorney(s) to make decisions about a donor’s property and finances; and
- Health and Care LPA – this allows the attorney(s) to make decisions about a donor’s medical treatment and day-to-day care, which can include whether or not they should receive life-sustaining treatment.
If an individual loses capacity without an LPA in place, their family or friends would have to make an application to the Court of Protection for someone (known as a ‘deputy’) to manage their affairs. Such applications however are costly – there is an application fee (currently £371), an assessment fee, an annual supervision fee, and if you are a property and financial affairs deputy, pay a security bond. This is excluding any costs for instructing a solicitor. The application can also take many months to be processed, which can be problematic if nobody is able to access the donor’s bank accounts (e.g. to pay bills) or make decisions on their behalf in the meantime.
The current LPA system:
Whilst the number of people using an LPA has risen considerably over the years, the process of making an LPA has hardly changed.
Currently, an LPA must be completed by the donor, attorneys (including any replacement attorneys) and certificate provider using a paper form. This follows a strict ‘wet signature process’ where the parties have to sign the LPA in a specific order by the donor and their witness, the certificate provider, and all the attorneys and their witnesses. This can prove cumbersome, particularly where parties do not live close by. The registration time can also be lengthy, which can be problematic when a donor has lost capacity and the attorneys are unable to act under the LPA pending registration.
The Powers of Attorney Bill:
Following the government’s response to the ‘Modernising LPAs’ consultation in May 2022, a new Powers of Attorney Bill has been introduced, which once enacted, will introduce amendments to the Mental Capacity Act 2005 with the aim of making the LPA process easier to use, quicker and more secure from fraud. These amendments will include:
- Only permitting the donor to apply to register an LPA;
- Allowing parties to choose whether to sign the LPA digitally or on paper;
- Requiring the OPG (rather than the donor) to notify named persons that an LPA is being registered;
- Bringing in new identification requirements in order to strengthen the safeguards against fraud;
- Widening the group of people who can object, including those not named in the LPA;
- Allowing the OPG to receive all objections (rather than only ‘factual’ objections currently, with ‘prescribed’ objections going to the Court of Protection);
- Enabling objections to be raised at any point after the OPG is aware that the donor intends to create an LPA; and
- Enabling Chartered Legal Executives to certify LPAs.
The above amendments will significantly reform the LPA system and hopefully encourage more people to consider making an LPA.
Yet, with the growing trend towards digital technology, identity fraud is becoming more widespread affecting particularly the elderly who are more likely to be the ones making LPAs. It is therefore imperative that the safeguards are not compromised in the process of simplifying the system and that an appropriate balance is met between efficiency and the protection of the donor.
Additionally, whilst the changes will be beneficial, they may not always have the desired effect. For instance, by allowing third parties to object to an LPA, this could lead to a rise in vexatious objections creating further delays. The government will need to regularly assess the new service to identify whether any further improvements are needed.
We do not yet have a timescale as to when the changes will be put into effect and people should continue to make their LPAs in the usual way (whilst ensuring they check the OPG’s official website for any updates).
Overall, whilst the changes will be a positive step towards the modernisation of the LPA system, safeguards must remain of paramount importance to ensure that donors are protected when granting these life-changing powers.