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Bringing Lasting Powers of Attorney into the modern world

Lasting Powers of Attorney (LPAs) have long been an essential tool when it comes to planning for the future. Their very nature is to be forward facing, to prepare now for what may come later. It seems odd then, that a system which is so set on allowing us as individuals to safeguard our futures does so by relying on processes based on decades, if not centuries, of tradition and legal case law. These processes now find themselves under the spotlight in a major reform announced by the Ministry of Justice on 20 July 2021.

 

How are things now?

The current system for creating and registering LPAs shares many of the paper-based features that were introduced with the Enduring Power of Attorney (the previous version of the document) 36 years ago. Although it is now possible to use technology to draft the LPA, a practice common in law firms and even available through online tools, it is still necessary to print a paper copy of the LPA, sign it, and post it to the Office of the Public Guardian (OPG) to be registered.

Over time, there has been a greater and greater uptake by members of the public registering their LPAs; 390,000 were registered in 2014/15 compared with 920,000 in 2019/20. The OPG calculated that it received over 19 million individual sheets of paper and produced roughly the same again itself in 2019/20 alone.

In an age where entire banks, utility providers, insurance companies and other kinds of business operate entirely online, it is unfortunate that the supposedly future-facing LPA has been left so far behind.

 

What is to be done?

The Ministry of Justice has thankfully recognized that things need to change to ensure that LPAs are fit for purpose now and into the future. The consultation documentation summarizes the main objectives as follows:-

  • New and improved safeguards to protect against fraud and abuse
  • Process to be made easier to use
  • Shift to predominantly digital service

To achieve this, they make the following seven proposals:-

  1. Examine the role and value of the witness to an LPA and consider how technology may be used to support remote witnessing or replace the need for a witness altogether.
  2. Examine the role of applying to register an LPA, including a look at whether LPAs can be digitally checked during the preparation stage to reduce the chances of rejection on registration. Also to consider whether to require that LPAs are registered immediately upon execution. (Currently you can delay registration as long as you wish following execution.)
  3. Examine the OPG’s remit and look at how it may be widened to include carrying out identity verification and the power to halt registration while it performs checks it deems necessary.
  4. Examine the process of objecting to the registration of an LPA with a view to making it easier to understand and more accessible to anyone who wishes to raise an objection.
  5. Examine at what point in the process people can raise an objection with a view to allowing an objection to be lodged from the time the preparations of the LPA begin, as opposed to only after it is submitted for registration.
  6. Examine the benefits of introducing an expedited registration service for urgent matters. (Though it is worth mentioning here that they would prefer not to do so as they doubt such a service would maintain high enough safeguards without becoming inaccessibly complex.)
  7. Examine solicitors’ access to the service and whether and how to integrate the new system into existing case management systems.

These proposals seem to be quite promising and certainly represent an overhaul of the current system. We will await the results of the consultation with interest, which are expected to be published in early 2022. The consultation itself will run until 13 October 2021 and is open to everyone, so if you would like to have your own say, please follow this link.

 

What to do in the meantime?

First and foremost, if you do not have your LPAs set up yet, do not wait to do this. The advent of an ultra modern digital service in a few years’ time will be of no use to anyone who finds themselves, foreseeably or unexpectedly, in need of assistance with the management of their affairs before then.

For advice on the preparation, registration, or use of LPAs please contact John Nettleship or another member of our Wealth and Estate Planning team.

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