What is a Lasting Power of Attorney (LPA)?

An LPA is a Deed by which you (the ‘donor’) can appoint someone you trust (the ‘attorney/s’) to deal with your finances on your behalf either as soon as it has been registered (finances only), or in respect of finances and your health and welfare, when you have lost the mental capacity to make decisions for yourself.    However, LPAs can only be set up when the donor has mental capacity to enter it intentionally and with full knowledge of what they are doing.

Once registered, an attorney will be taking on a huge amount of authority over someone’s life so it is important for you to consider very carefully who you would want to make decisions on your behalf.   Having no LPA in place, however, could mean that if you were to lose capacity, your bank accounts may be frozen, and decisions regarding your welfare and living arrangements made by professionals or government appointees and not someone you would have chosen.    To make best interest decisions on your behalf your family may be faced with the costly process of applying for Deputyship through the Court of Protection, which can be more restrictive, and comes with annual reporting.   They will also have to pay a surety bond in respect of finances.  

What are the issues with the current system?

If you have been through the current process of making an LPA, either for yourself or as an attorney for a loved one, you will recognise that it forms of, largely, a series of administrative hoops.  As a result, there is a lot of potential for the forms to be completed incorrectly and rejected by the Office of the Public Guardian (OPG).  

Recent data obtained by a Freedom of Information (FOI) Act request by Quilter revealed that the main reasons for LPAs being rejected are incorrect signing order (there is a strict order of signing the LPAs the donor, certificate provider and attorneys and the donor again), missing information (often just a missing date), incorrect witnesses, unworkable requests or not providing full names.

Of the roughly 800,000 that were registered in the last year, nearly 30,000 were rejected due to these kinds of errors.   While it may seem a small number in comparison, if those people do not brave the process of re-registration, it is a lot of people whose finances, and care decisions are made outside of the hands of those they trust should they later lose capacity.      

Despite the rather bureaucratic process, it was also felt that the current system for completion and registration doesn’t always offer the protection from fraud and abuse it intended.   For example, even though bankruptcy precludes someone’s ability to be an attorney in respect of finances, the administrator at the OPG can only check the insolvency register for the date that they are processing the forms, which wouldn’t prevent someone who is due to be declared bankrupt, but hasn’t yet, successfully being appointed as an attorney at that time.     Clearly, this is a very dangerous prospect!

Also, while it is great that large numbers of people having opted to make a Lasting Power of Attorney since 2007 when they came into existence (there have been over 6 million registered), due to staffing issues and the heavily paper intensive process, it is taking up to 18 weeks for the OPG to register them, even when there are no completion issues.  This could cause problems for those that need someone to decide matters on their behalf in the interim.       

What does the Powers of Attorney Bill propose to do?

The Powers of Attorney Bill (POA Bill) has passed all parliamentary stages and awaits Royal Assent.  When it has, the process for obtaining a Lasting Power of Attorney will be drastically different.

The new system will be largely digital, which is more in keeping with the modern world we live in, although it is understood there will still be a paper process for those not able to use electronic formats.    This in turn will hopefully reduce the scope for mistakes since there’s no getting through to the next ‘stage’ if one isn’t completed correctly. 

Currently, while all Solicitors firms must check the ID of their client, they are not obliged to check the ID of the attorneys or the certificate provider (if they have not so acted).  This is likely to change, and the onus will be on the Office of the Public Guardian to do so, which will offer greater protection from fraud.  

The OPG also has no current power to investigate and stop the registration of an LPA if they receive notification from anyone in respect of any concerns.    It would be up to that person to make a formal objection to the Court of Protection.    The POA Bill seeks to change this by making it possible for anyone to raise an objection to the OPG and to give them power to investigate and stop registration.

As the donor pays the fee at the outset of the process, only the donor can make an application to register the LPA, as opposed to either the donor or the attorneys.     

It will also include an amendment to the Powers of Attorney Act 1971 which will allow for Chartered Legal Executives to certify copies of an original document.   Currently they are not allowed to do so, which is at odds with the evolved legal landscape but is due to the way the statute has been drafted.  The process for certifying copies of documents is a straightforward process and Chartered Legal Executives can and do certify copies of other formal documentation on a regular basis.

Currently, the process of making a Lasting Power of Attorney remains the same, and in many ways, as long as it has been completed properly and you have the required capacity (a topic in itself!) to set one up, you can do so relatively simply online through the Government portal.   

If you require any advice or assistance with preparing LPAs please contact Jen Bleby on 01494 893526 or by email.