Professionals working with the elderly and vulnerable are raising concerns over future safeguarding following a dramatic fall in the number of Lasting Powers of Attorneys (LPAs) registered during the coronavirus pandemic.
Figures from the Office of the Public Guardian, the government body responsible for registering LPAs, reveal that the number of applications dropped by 25% over the last year. In 2020/21, just 691,746 were made, compared with 917,550 in 2019/20.
An LPA is a legal document that lets someone appoint one or more people known as ‘attorneys’ to help them make decisions and act on their behalf. An attorney will often be a trustworthy family member or friend who has the time and skills to help manage day-to-day affairs. Professionals, such as a solicitor, can also be appointed as attorneys if there is no suitable friend or family member, however a professional will charge a fee for their time spent in managing your affairs. Anyone over 18 can set up an LPA at any point during their lifetime, as long as they have ‘mental capacity’ to make the decisions involved in drawing one up.
There are two types of LPA, one for property and financial affairs and one for health and welfare. While vital for the vulnerable and those who are housebound or unable to conduct their own affairs, an LPA for property and financial affairs can be used as soon as it has been registered. This means they are equally useful if an individual is regularly out of the country and wants someone to act for them while they are away, or for a person suffering from a physical disability, or where someone has all their faculties but does not want to have to deal with everything themselves.
In contrast, an LPA for health and welfare cannot be used until mental capacity has been lost. The attorney would be responsible for arranging where someone lives, decisions on medical care and consenting or refusing life sustaining treatment.
LPAs are a legally binding document recognised by banks and other financial institutions. An LPA for property and financial affairs allows the attorney to make financial decisions on behalf of the individual including running bank accounts and paying bills as well as managing property, pension, taxes and investments.
Those who are self-employed or a company director should make a separate LPA limited to business matters. Your chosen attorney for your personal property and financial affairs may not have the appropriate skills or knowledge to be your business attorney and manage your company.
“It’s worrying to see the drop in numbers over the last year, as without an LPA in place it is much more difficult for anyone to step in and manage affairs once someone has lost mental capacity. The only option is to go through the slow and costly process of applying for permission to act on someone’s behalf through the Court of Protection,” explained Private Client Solicitor Sohret Haffenden.
“The figures show that some 230,000 fewer people registered an LPA, and that is effectively a timebomb for the future, unless there’s a concerted effort to catch up.”
When someone loses mental capacity there is no automatic right for spouses, civil partners or children to look after their finances, even if they hold a joint account together. This means that without an LPA, the Court of Protection will appoint a deputy, and the deputy may be someone who does not know the individual, such as a professional.
The fall in numbers comes despite the launch of additional online services in 2020 intended to simplify the process of making an LPA. The Office of the Public Guardian is committed to increasing the use of digital applications and has recently completed a twelve-week consultation process to look at how future adoption should be undertaken. This has seen groups expressing concern at the need for oversight in the process, to protect against fraud and also to avoid LPAs being rejected. Since the introduction of the digital process, figures show a rising number of applications being rejected by the OPG, often because individuals have drafted their own terms or permissions, and these are outside those allowed.
“An LPA is an essential element of lifetime planning and it is the only way you can be sure that someone of your choice is able to deal with your affairs and make decisions for you. You should update your chosen attorney of your preferences and wishes throughout your lifetime so that they have the knowledge to make decisions in your best interests, should you lose mental capacity. LPAs are critical documents so it’s important to get professional advice and build in the right protections from the outset. Expert knowledge can ensure you have a valid LPA that reflects your wishes and protects against possible financial abuse,” added Sohret Haffenden.
Our friendly and experienced Private Client team are on hand to advise on any issues relating to Powers of Attorney. We offer a fixed cost service for Powers of Attorney which we can discuss with you. Please telephone 01892 526344 or email firstname.lastname@example.org.
For further information on all our Private Client services, please click here.
If suitable, we can offer an initial one hour appointment with a solicitor for a fixed cost of £100 + VAT, giving you the opportunity to discuss your matter and consider your options. This can be in person, via telephone or video link. Please get in touch if you feel this type of appointment would be beneficial.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.