Why Powers of Attorney are moving into the 21st century

Philip Kingscott

Philip Kingscott

Private Client Director

Since 2007, the Lasting Power of Attorney (LPA) has been a valuable way of ensuring that a trusted person can manage your affairs if you no longer can.

They are a vital part of any financial plan, as you can nominate one or more attorneys to make important decisions regarding your care if you lose capacity.

This autumn, the government has enacted a new piece of legislation designed to make applying for an LPA easier and more secure. Read on to find out more about how Powers of Attorney are moving into the 21st century.

Registering an LPA enables you to nominate a trusted person to make decisions for you

If you want to ensure that someone you trust can make important decisions if you’re no longer able, registering an LPA is a vital step.

There are two types of LPA:

  • Property and affairs LPA – Here, your chosen attorney(s) can make decisions such as buying and selling property or managing bank or building society accounts or investments.
  • Health and welfare LPA – Your attorney(s) can make decisions about medical treatments and care arrangements such as where you should live and your day-to-day care.

Note that you must have lost mental capacity for a health and welfare LPA to come into effect. An attorney can make financial decisions on your behalf even if you retain capacity.

New Powers of Attorney Act aims to streamline the process and to make it more secure

Historically, setting up an LPA has been a long and often complex process, with the requirement for a paper-based submission.

Consumer champion Which? reports, under the current system, it currently takes around 20 weeks to register an LPA with the Office for the Public Guardian (OPG).

The number of registered LPAs has increased to more than 6 million in recent years but the process of making one retains many paper-based features that are more than three decades old. The OPG handles more than 19 million pieces of paper as a result of its offline system each year.

The 2023 Powers of Attorney Act, which received Royal Assent in September, aims to streamline the process and will make the system quicker and easier to access for the thousands of people who make and rely on an LPA every year.

The legislation, which was introduced by Stephen Metcalfe MP and supported by the government, will also strengthen security by allowing checks on the identity of those applying for an LPA.

The digitalisation will speed up registration time by picking up errors earlier and allowing users to fix these online, rather than having to wait for documents to be posted back and forth between the applicant and the OPG.

Justice minister, Mike Freer, said: “Millions of people rely on a Lasting Power of Attorney to make sure their care and finances are taken care of should they lose mental capacity.

“This Act allows us to modernise the service, introduce new safeguards from fraud and abuse and make it simpler to give people peace of mind their interests will be protected.”

There will also be an improved paper process introduced for those who are unable to apply online.

New system is in the testing stage

The OPG is currently developing the new online system and the additional safeguards before entering into a phase of extensive testing. The government say, that it will publish more information on the rollout of the online process in the coming months.

Amy Holmes, the Public Guardian for England and Wales, said: “This is a significant milestone in our plans to modernise Lasting Powers of Attorney and we are one step closer to a quicker, more secure and straightforward service.

“Our focus now is on continuing to develop, test and refine a new online platform and improved paper process to ensure we provide a service that will include additional safeguards and suit the needs of all our customers.”

While the new system is in development, the OPG has increased the number of staff processing applications. The team are now registering around 19,000 more LPAs a month than before the pandemic.

Setting up an LPA can give you and your loved ones peace of mind

Registering an LPA can give you the peace of mind that someone you trust will look after your affairs if you can’t.

If you’re facing an illness or are concerned your mental capacity might deteriorate in the future, it’s worth thinking now about who you would like to make important decisions on your behalf.

Remember that you can only set up an LPA while you retain mental capacity. So, if you put it off, it could be too late by the time you need one. In this case, the Court of Protection will have to nominate a “deputy” to act on your behalf – and this may not be the person you would have chosen.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

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