Proposals will allow Lasting Power of Attorney to be entirely arranged online.
Putting a Lasting Power of Attorney in place is a really good idea for most of us.
As we get older, we may no longer be able to make the right decisions over things like the management of our money or care, and this legal setup is a good way to protect your and your loved ones from any issues that might arise as a result.
What’s more, putting a Lasting Power of Attorney in place looks set to get easier, after the Ministry of Justice published plans to modernise the process of arranging one.
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What is Lasting Power of Attorney?
Lasting Power of Attorney (LPA) is a legal arrangement, where you allow someone else ‒ an attorney ‒ to make decisions on your behalf should there come a point when you no longer have the mental ability to do so.
LPAs come in two forms: a property and affairs LPA and a health and welfare LPA. You can choose to make both types of LPA or just one ‒ it’s entirely up to you.
LPAs can be incredibly useful. Unfortunately more and more people develop dementia as they get older, making it harder for them to make the right decisions around the management of their money and welfare.
By putting an LPA in place, you can ensure that a trusted friend or loved one is given that responsibility should you lose the ability to do so yourself.
How is LPA changing?
The Government has just concluded a consultation with all sorts of representative bodies active in this area, such as age-related charities, solicitors and banks, with the aim of modernising the process of establishing an LPA.
And it has now published proposals, which it believes will make LPAs more accessible.
For example, LPAs will now be able to be set up entirely online.
Currently the registration process involves a lot of filling out of paper forms, which is not only slow but can lead to errors in the registration.
The hope is that moving it online will eliminate those errors and speed things up, though people setting up an LPA will still be able to do it through the paper system should they wish.
Alongside this, new safeguards are being put in place to protect against abuse or fraud, such as a strengthened ID verification process.
Essentially, the idea is that technology can make LPAs simpler and easier to set up, as well as more secure from fraud.
Obviously, there is a big balancing act at play here.
Making it more straightforward for people to put an LPA is a great idea, as is making the most of technology.
The fact that a lot of the work involved in an LPA has been unchanged for three decades is in itself a damning indictment of how slow progress has been on this front.
However, it’s also vital that the proper protections are in place, that there is little to no chance of fraudulent LPAs being registered.
These arrangements are simply too important to allow any new vulnerabilities to be introduced, as an unintended by-product of technological progress.
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We are taking a risk
While LPAs can offer real protection to families, they are not being taken up by many people.
Recent research from Canada Life found that more than three-quarters of those over the age of 55 do not have an LPA in place.
What’s more, there has been a significant drop in the number of LPAs being registered.
A Freedom of Information request from Canada Life to the Ministry of Justice revealed that in the 2020/21 tax year there were 636,628 registrations completed, which is down by 26.5% from the year before.
Thankfully, this follows five years of increases to registrations, and is partly explained by the changes to the LPA registration process which were necessitated by the pandemic, as well as the resulting backlog.
However, what’s clear is that improving awareness of LPAs ‒ as well as modernising the process for putting one in place ‒ will mean far more families will be able to benefit from this safety net.
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Improving understanding
It’s also important to note that the LPA system is badly in need of improvement when it comes to the financial firms involved.
As we have reported before, it’s all too common for the staff at banks and building societies to have little idea of how LPA works, leading to further upset and stress when the time comes for the attorney to act on their loved one’s behalf.
It’s crucial that the Government now focuses its efforts on making sure that there is a consistent approach and proper oversight of how LPAs are handled by financial firms.
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