The modernisation of lasting powers of attorney: significant milestone as Government makes decision making digital
A revision to the rules around making a Lasting Power of Attorney (LPA) will mean it will soon be possible to use an online system for their creation and registration after the Government announced the Royal Assent of the Powers of Attorney Act 2023 on the 18th of September 2023.
Why do I need an LPA?
If you no longer have the capacity or can otherwise no longer make choices for yourself effectively, then a power of attorney is the legal document that will enable someone to act on your behalf. You might need an LPA for a variety of reasons, from a short-term situation where you’re in hospital and require assistance with daily activities like paying bills, to long-term circumstances like being diagnosed with dementia – meaning you may eventually lose the mental capacity to make your own decisions. It may be difficult to consider losing your mental capacity, but it is important to prepare for the possibility, and having an LPA is one way to safeguard your assets and yourself in case this were to happen to you.
An LPA is a powerful legal document, giving peace of mind that someone you trust is in charge of your affairs. Making an LPA does not automatically indicate that you will no longer be able to make decisions for yourself. When you are still mentally capable, the document can only be used with your permission (and only in relation to financial decisions – not those regarding your health and welfare, where the Attorney can only act in the event you are unable to do so). When you are no longer capable, it can only be used to make decisions that are in your best interests.
Many people still hold the misconception that their next-of-kin would automatically be able to make decisions for them should they no longer be able to do so. The Powers of Attorney Act 2023 aims to take an important step forward in helping everyone plan for the future through a simplified and streamlined online process.
The changes: ‘easier, quicker, and more convenient’ say the Office of the Public Guardian (OPG)
After a response from the Ministry of Justice Consultation in May 2022, a revamp to the creation of an LPA was sparked. Accordingly, the Bill modifies the Mental Capacity Act 2005 to significantly alter how LPAs are created in England and Wales.
For example, the Bill introduces identity verification requirements for registering an LPA. Additionally, depending upon whether an LPA is made digitally, on paper, or a mix of both, it provides for new forms of evidence of the LPA itself to be created and accepted. Although there are now more than 6 million registered LPAs in England and Wales, the creation process still includes several paper-based elements that are over 30 years old. Because of its offline approach, the OPG processes more than 19 million pieces of paper annually.
In addition to being unfriendly to the environment, the current system is pretty displeasing to its users too. A study published in February 2022 by consumer watchdog Which? highlighted significant flaws in the UK’s LPA system, stressing a need for ‘urgent improvements’ after the poll uncovered complaints such as lost documents, unnecessary in-person branch visits and failure to explain processes. The Telegraph recently highlighted the ongoing LPA registration delays, where it was unveiled that in August 2023, LPA applications were taking up to, and sometimes more than 20 weeks, resulting in a third of a million LPA applications still pending which has left some families in desperation over how they should pay for care home fees and other bills.
It is hoped that the Powers of Attorney Act 2023 paving the way for digital LPAs will allow for mistakes to be identified early and enable them to be corrected online, rather than waiting for paperwork to be sent back and forth between the OPG and the applicant as is presently the case. Through digitalisation the OPG will be able to run a streamlined, automated administrative process instead of relying on humans who are more likely to make errors. For individuals unable to use the internet, an enhanced paper process will also be implemented.
Additional safeguards
The Bill’s modernisation of lasting powers of attorney has resulted in the implementation of new security measures. To ensure that only the donor can apply to register an LPA, the Bill has introduced identity authentication as part of the application process. According to the Ministry of Justice, this will improve the donor’s protection from abuse while also making it simpler for them to create an LPA. This protection hopes to give confidence to people by enabling them to maintain control of their life whilst still making plans for the future.
A word of caution
Whilst the Lasting Powers of Attorney Act 2023 has introduced identity authentication safeguards to prevent applicants from falling victim to fraud and abuse, it is unknown how this will work in practice. Without adequate measures, there could be a risk of vulnerable applicants being led to partake in the new and simple online process by their Attorney without their understanding its full meaning. Some professionals have expressed concerns that the Powers of Attorney Act 2023 does not include a clause requiring the Certificate Provider to certify the legal ability of the Donor, and that the provision requiring the Attorney to register the power rather than only the Donor is still in place, despite the Law Society recommending this to be taken out.
What's next?
The OPG is now creating the new online system and the additional protections. In order to ensure the process is user-friendly, secure, and operates as intended, extensive testing will be completed. Amy Holmes, the Public Guardian for England and Wales remarks that ‘Our focus is now on continuing to develop, test and refine a new online platform… we are one step closer to a quicker, more secure and straightforward service.’ Although there is good reason to be optimistic, it is unclear how these changes will operate in practice. More details about its availability will be released in the upcoming months.
Our team of expert Power of Attorney solicitors advise on both types of LPA – the Property and Financial Affairs LPA and the Health and Welfare LPA. We also advise on Enduring Powers of Attorney (EPAs) and Advance Decisions. Arrange a call with one of our experts today.
Sources:
- LPAs (Blakemorgan.co.uk)
- Press release: ‘Step forward to online lasting powers of attorney’ (Gov.uk)
- ‘UK parliament passes Bill enabling digital LPA procedures’ (STEP.org)
- ‘Power of attorney’ (ageuk.org.uk)
- ‘Thousands wait months for powers of attorney to care for loved ones as civil servants work from home’ (The Telegraph)
- ‘Power of attorney system in desperate need of improvement, Which? warns’ (Which?)
- ‘Powers of Attorney Bill: What to expect’ (todayswillsandprobate.co.uk)
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