Lasting Powers of Attorney (LPAs) are set to be modernised according to new government standards established in July 2021. More people than ever are looking into establishing an LPA to secure their future, and the old process is set to be scrapped for a new, streamlined version that will include additional safeguards.
What Are Lasting Powers of Attorney?
An LPA is a powerful legal document that allows you to appoint an Attorney to make decisions on your behalf if you become unable to do so. People may establish an LPA for many reasons, such as being diagnosed with an illness like dementia or Alzheimer’s or in the case of any illness or accidents occurring in the future.
LPAs give people an additional degree of control over what happens to them if they lose capacity in the future. There are two types of LPAs that people can opt for:
- An LPA for property and financial affairs – this covers any decisions that need to be made regarding finances and property, such as paying bills, selling property, and managing investments.
- An LPA for health and welfare – this allows the Attorney to make decisions based on medications, housing, and medical treatment. It also allows the Attorney to decide on care, such as whether the Donor is placed in a care home or is cared for by the family.
The Attorney of an LPA must follow various regulations when making decisions on behalf of the Donor (the person who has established the LPA and appointed the Attorney). They must:
- Consider the Donor’s feelings, both past and present
- Encourage the Donor to be a part of any decisions made
- Carry out any instructions left by the Donor
- Keep records or payments made on the Donor’s behalf
Many people do not know what LPAs are. However, research shows that 85% of people have an idea of what an LPA is, although they think that the Donor will lose control of all their finances once it is established. However, this is not the case. Even though the Attorney will have power over the Donor’s finances (if a financial LPA is created), the Donor will retain access and control of their finances until they lose mental capacity.
Some people will never have to use an LPA. However, by the time people feel they need one, it may be too late, and they may have lost the mental capacity they need to establish one. Without an LPA in place, people have no control over who is in charge of their affairs, so many choose to apply for one for peace of mind.
Changes to Lasting Powers of Attorney
The changes proposed that will modernise LPAs include:
- New safeguards to protect individuals against fraud and abuse
- A simpler application process
- A shift to a digital service
- Changes to who can object and why
Safeguarding the Donors of LPAs is crucial as Attorneys hold so much power. The Attorney has the power to control the bank accounts of the Donor, as well as sell their home, meaning there is a potential for fraud and abuse to occur.
Anyone over the age of 18 can apply to become an Attorney as long as they have the full mental capacity to make decisions. Someone bankrupt may not be granted an LPA over a Donor, but aside from this, there are few restrictions on who can become an Attorney.
The new rules call for identity checks to be introduced to allow the registration process to be stopped if there is apparent cause for concern. Along with this, how abuse of an LPA is reported will change. Currently, the Office of the Public Guardian (OPG) relies on third-party reports to raise concerns. Under the modernised system, the OPG would gain powers to flag abuse that is not raised by others.
Other suggestions include assessing whether remotely witnessing the signing of LPAs is an adequate safeguard or whether additional measures need to be taken, and how to reduce the chance of LPAs being rejected.
Objecting to an LPA
It is possible to object to the creation of an LPA. Objections may be raised if you or others think someone was pressured into agreeing to one or the Attorney does not have adequate mental capacity. Under the proposed changes, more people will be able to raise objections. Only the Attorney, the Donor, or a person to be told can object. The Donor can notify up to five people to be told who then have three weeks to raise concerns and objections with the OPG. However, anyone with concerns will have the right to raise an issue in the future.
There is currently only a four-week window in which people can object to an LPA being established in the current system. However, this does not consider the potential changes or deterioration of the Donor’s condition – there can be potential delays in making vital decisions until the registration is complete.
Therefore, the proposed changes would scrap the four-week period so anyone can object from the start of the application to when it is registered. This would also speed up the application process, and digital checks would help to safeguard Donors and raise protections from fraud.
Conclusion
Modernising Lasting Powers of Attorney may encourage more people to apply for them, giving them an extra level of protection and control over their finances in the future. Although these safeguards are not yet in place, they have a lot of potential and would allow many people to have additional protections if they lose capacity.
Contact The Planning Bee today if you are considering an LPA to secure your future. Our paralegals are highly experienced in establishing LPAs and will guide you in your decision.