Loss of mental capacity is a growing issue in our society with rates of dementia alone expected to increase sharply in coming years due to an ageing population. With this background, it makes sense for individuals to take steps to future proof the handling of their affairs. One way of doing so is to create a Lasting Power of Attorney (LPA).
Broadly, an LPA is a document which enables the person making it (the Donor) to appoint one or more people (the Attorney(s)) to make decisions on the Donor's behalf if the Donor loses mental capacity. There are two types of LPA a Donor can make: one to deal with their financial decisions and one to deal with decisions about their health and welfare.
If an individual loses mental capacity and does not have an LPA (or an earlier equivalent known as an Enduring Power of Attorney) in place, an application must be made to court to appoint a deputy to manage the individual's affairs. This can be a time-consuming and costly procedure - particularly unhelpful at a time when there may be some urgency in needing to deal with the individual's affairs. For these reasons, an individual is well-advised to make one or both types of LPA whilst they have capacity to do so.
Whilst the LPA route is preferable, it is not without its own issues. There has been growing concern around the number of cases referred to the Office of the Public Guardian (the body responsible for registering LPAs and supervising Attorneys) (the OPG) for investigation of abuse by Attorneys. Aspects of the LPA making process have also been criticised as cumbersome and outdated, especially in light of various advances in technology. The Government has undertaken to review the procedure for making and registering LPAs, with a view to modernising the LPA-making process and seeking ways to reduce the risk of an Attorney abusing the authority granted under an LPA.
The key objectives of the modernisation project are to:
- increase safeguards, especially for the Donor
- improve the process of making and registering an LPA
- achieve sustainability while keeping LPAs as affordable as possible.
Changes are expected in the following areas:
Signing and witnessing of LPAs
- Increased use of digital technology to simplify the witnessing of signatures and/or reviewing the requirements for witnessing.
- Combining the role of the "certificate provider" (the independent person who signs an LPA to confirm the Donor knows what they are signing) and witness to simplify the signing procedure for the Donor. There is confusion between the roles of the certificate provider and a witness, and a perception that the role of a witness provides limited safeguards by only verifying that a person signed the document. A witness does not, for example, have to verify the identity of the person signing.
Certificate providers
- Additional guidance and support for certificate providers to ensure they understand their role in assessing the Donor's understanding of the LPA and protecting against fraud, abuse and undue pressure.
- The certificate provider will not, however, need to be a professional. As is currently the case, the certificate provider can be a professional or a person who has known the Donor for at least two years.
Timing of registration
- The possible introduction of a requirement to register an LPA as soon as it has been executed.
- Currently, an executed LPA can be registered at any stage – including only when it is required for use, noting that an LPA can be registered by the Donor or the Attorney(s). This is problematic if the OPG find errors with an LPA preventing it from being registered at a time when the Donor has lost mental capacity and so is no longer able to make a new LPA.
Verification of identity
Enabling the OPG to verify the identity of the Donor, Attorney(s) and certificate provider.
Objections
- Provision for anyone with legitimate concerns to object to the registration of an LPA at any time during (and possibly before) the creation and registration of the LPA.
Currently, objections can be made on the basis that:
- the LPA was not legally executed – for example, the Donor did not have capacity to create it or was under undue pressure to do so
- the Attorney no longer has power to act under the LPA – for example, due to the death of the Donor or bankruptcy of the Attorney.
There is only express provision in the legislation for objections to be made by Donors, Attorneys and other named persons, being such persons as the Donor has set out in the LPA. The OPG often receives objections from third parties, including family members and Local Authorities. However, the legislation does not set out a clear basis on how to deal with such third party objections and it is understood this can lead to some potential objectors feeling that they are unable to intervene and confusion over how the OPG should handle the objection.
- Provision for all objections to be dealt with by the OPG.
- A possible change in the length of the statutory waiting period prior to registration of an LPA (which provides a window of opportunity for objections).
Digital service
- A possible requirement for legal professionals to create and register LPAs through a digital service.
Watch this space for further updates.
If you have any questions about LPAs or would like to discuss putting one in place, please contact our Private Client team.
