New Digital LPAs- A welcome reform or a minefield

The Office of the Public Guardian’s (‘OPG’) is the administrative body responsible for the registration of Lasting Powers of Attorney (‘LPA’). Their annual report covering 2022 to 2023 demonstrates that in the same financial year, 1,073,032 LPAs were created. This is the highest amount recorded per financial year to date.

However, in recent years there have been concerns that the existing paper-based system for creating and registering LPAs is difficult to use and has resulted in deficiencies by the OPG. In 2019/20, approximately 15% of LPAs were sent to the OPG with errors rendering them imperfect or invalid. There were also concerns that with the rising mortality rates and number of LPAs on the register, the measures in place to protect donors against fraud and abuse were in need of review.

Since 2021 the Ministry of Justice (‘MoJ’) and the OPG have been working together to improve the LPA system. This has resulted in the enactment of the Powers of Attorney Act 2023 which makes changes to the Mental Capacity Act 2023 by introducing a new, modernised service for creating and registering LPAs, making the process “safer, simpler and fit for the future”.

What changes are being made?

1. Online LPAs: The main change is the introduction of a new digital service which can be used to create and register LPAs online. It is intended that the current paper-based system will remain available for those without access to the internet.
    

A digital service is expected to speed up processing by the OPG, reduce errors when completing the forms and allow errors to be fixed online without donors needing to start the whole process again (which is usually the case under the current system).
 

2. Prevention of identity fraud: The OPG will verify the identity of the donor (the person making the power of attorney), the attorney(s) and replacement attorney(s) (the people appointed to make decisions on behalf of the donor) and the certificate provider (the person which is often a professional certifying that the donor has mental capacity to make an LPA) as part of the registration process.
    

There are however some concerns that this could cause difficulties for members of the older generation who do not own a valid passport or hold a driving licence. The OPG will need to provide an alternative method for ID verification of such individuals.
 

3. Notification: The OPG will be responsible for sending notifications to any notifiable persons removing this responsibility from the donor (or the attorney(s), where relevant). This change is being introduced to ensure any notification requirements are met and to remove the administrative burden from the donor.
    
4. Registration: The Act plans to restrict the ability to register an LPA so that only a donor will be able to do this. What is not clear at this stage is who will be permitted to register an LPA where a donor loses capacity before the application for registration has been made (or whether immediate registration upon creation of the power is to become compulsory). Under the current system, the donor has the option of applying for registration as soon as the power is created, or can leave registration to his/her attorneys following the donor’s later loss of capacity (the latter approach being taken by a more cautious donor who wishes to limit the opportunity for fraud).
    
5. Objection to registration: There will be the introduction of a single process for all objections to the registration of LPAs, regardless of whether or not that person/organisation is named in the instrument itself. The process will start with the OPG and end at the Court of Protection.

There are some concerns that widening the category of those able to object could increase costs and come at the expense of the taxpayer (for example, objections made by former partners and estranged family members).

6. Evidence of registration: The new process will mean LPAs are registered as an electronic document that can be accessed and updated by the OPG. There will no longer be a need to return the original paper LPA to the OPG when changes are required (for example, where a sole attorney dies and a replacement attorney required to step in).
    
7. Certificate providers: What the new legislation has failed to address is the well sought-after clarification regarding the role of the certificate provider. The Ministry of Justice has pledged to provide additional guidance to certificate providers, and it is hoped that this will be addressed in the next legislative stage.

The next stage

Despite receiving Royal Asset over 6 months ago, the OPG say there is still a long way to go before we will see these changes being implemented in practice. The next legislative stage will involve the development of the secondary legislation to amend the current LPA regulations. No date for this has yet been confirmed.

The OPG intend to develop the online system over the next year which will then need to be fully tested to ensure it is fit for purpose before it is made available to the public. It is therefore likely to be a matter of years before we see digital LPAs being used in practice.

6 Reasons Why Legal Guidance is Vital for Lasting Power of Attorney

Given the introduction of online LPAs and the changes being brought in to simplify the process, some may wonder if there is still a need to involve solicitors and other professionals when thinking about making an LPA.

We would strongly recommend that all individuals obtain legal advice when creating an LPA. Here are just some of the reasons why:-

• We can help you fully understand the aim and effect of your LPA and bring to your attention other matters which could need addressing (for example, updating your Will or eligibility for unclaimed benefits);
   
• We can discuss and help you decide who to appoint as your attorney(s), ensuring that the attorneys proposed are suitable for the role and that they fully understand their duties and responsibilities if they are required to act as an attorney;
   
• We can advise you on whether to appoint your attorneys on a joint or joint and several basis after reviewing your circumstances and explain how the different types of appointment would work in practice;
   
• We will explain to you the advantages of appointing replacement attorney(s) and will ensure your LPA specifies the order in which you would like them to act (where just one of your primary attorneys is unable to);
   
• We can act as your certificate provider and you can feel reassured that what you tell us remains confidential (in contrast to a friend or neighbour acting as certificate provider who would not have the same duty of confidentiality);
   
• We can advise on any bespoke preferences and instructions which you may wish to include in your LPA depending on your circumstances and what is important to you;
   
• We can offer advice in circumstances where an LPA may not offer you full protection, for example, if you own assets abroad or have already made an Advance Decision; and
   
• We can assist with the preparation of an LPA to govern any business interests you might have.

Instructing a solicitor to prepare your LPAs also entails an element of safeguarding that preparing them yourself, at home, does not. We will keep a record of all discussions we have with you regarding your LPA which could assist in future should your attorneys disagree on a matter. When your LPA is complete, with your agreement we will keep the original document in our secure storage facility. We will only release this to your attorneys with your consent or if we are satisfied the document should be used. We will also verify the identification of your attorney(s) to ensure that the risk of fraud is limited, and can assist with any queries they may have with regards to their duties as an attorney.

If you need help with preparing an LPA please call our Private Client Team on 01242 574 244 who will be happy to answer any questions you may have.