Lasting Powers of Attorney (LPAs) are tremendously beneficial: they enable donors to appoint one or more people as attorneys to help them make decisions or to make decisions for them. For anyone who, for any reason, can no longer make decisions about their affairs, an LPA empowers the attorney to act on their behalf - in their healthcare, property, and/or financial affairs decisions, for example.
Initially created under the Mental Capacity Act 2005, LPAs first came into effect in October 2007, replacing Enduring Powers of Attorney (EPAs). Intended to meet the needs of those who envisage a time when they will lack capacity, as defined by the Act, to look after their personal, financial or business affairs, LPAs are created and registered with the Office of the Public Guardian (OPG), an arm of the Ministry of Justice (MoJ).
An Ageing Population
As the UK population ages, more LPAs are being registered. The current total of around 4m is expected to rise much further over the next 20 years as the number of old people continues to increase. But the present system for granting them is flawed, often lengthy and invariably hard to navigate: it now takes an average of 20 weeks to put an LPA in place. Recognising that the process is 'cumbersome, bureaucratic and complex', the MoJ and OPG are now endeavouring to simplify it. In doing so, they have consulted with banks and law firms to determine how to make it better.
Digital Service
One alternative being considered is to use a predominately digital service, about which the OPG provides the following guidance: “Once an LPA is registered, attorneys and donors will be sent an activation key. They can create an account online at ‘Use a lasting power of attorney’ and use the activation key to add LPAs to their account. A donor or attorney can then make an access code which they can give to organisations to view an online summary of an LPA.”
The current paper-based process enables attorneys to prove their status to banks, healthcare providers, local authorities and other organisations. But there is a practical problem with a digital alternative for those who are most likely to need an LPA: they are often elderly and either infrequent or non-users of services online - the diametric opposite of GenY digital natives, aka millennials.
Taking the process online will probably alienate many of them, or worse, put them at risk of becoming possible victims of fraud, manipulated by unscrupulous individuals who portray themselves as “helpers”. Whereas it is an absolute requirement for an LPA to have a witness because it is a deed, no witness appears to be deemed necessary when it is provided digitally.
At the point when they have to consider putting an LPA in place, those who most need them will probably also need help in completing them because they are elderly. They may be vulnerable, not fully understand online procedures, or simply lack capacity and try to make an LPA anyway - who is going to assess this? At least the paper-based system provides relevant safeguards for those who might be at risk. It can evaluate what people who request an LPA are seeking to achieve and help to prevent “the lovely neighbour”, who is really a malefactor, from registering an LPA fraudulently on the donor’s behalf. But online LPAs could be quite different. In practice, the advice and protection offered to people who consider registering an LPA online may be somewhat limited. Even though LPAs require a set form, many important choices are still necessary: who the attorney(s) should be, whether they can sell the donor’s house (if needed) or open/close their bank accounts. Should the online process turn out to be as unsuitable in practice as online applications for probate have been, then it is equally likely that LPAs will not meet many donors’ needs because relevant issues will simply not be considered.
No one can be in any doubt that the current system needs improvement to rectify its inherent flaws. But if the same systematic errors were duplicated, then transferring the application process online will not make things any better; potentially, it will make them worse. Most implementation delays do not arise because of the LPA process itself, but because the staff in the relevant financial organisations dealing with them have not received the appropriate level of training. Giving attorneys an online access code that “proves their identity almost immediately” will not resolve the problem. Instead, it might serve to give unscrupulous attorneys greater scope to embezzle funds.
Final thoughts
The process of creating an LPA is complex. It also represents a significant step for the donor with potentially serious consequences. Although practical changes are certainly needed, a digital-only solution would not serve the needs of those with the greatest need in making them. After careful consideration, relevant decision-makers will hopefully agree that the safeguarding risks are simply too great.
About the author: Abigail Howson is a specialist private client lawyer and partner at Excello Law.
