The administrative process of registering lasting powers of attorney has long been considered confusing and time-consuming, but new legislation will modernise this by introducing an online system and improving the paper process.
After receiving Royal Assent in September, the Powers of Attorney Act 2023 will update the current paper-based system and bring it online, speeding up registration and strengthening safeguards against fraud to make it more secure.
Digitalisation aims to reduce processing times and human errors, ensuring that vulnerable members of society have better protection if they lose the mental capacity to make their own decisions about their healthcare and finances.
Not everyone is aware of the importance of lasting powers of attorney, or the changes to the system in the works – so here is a quick guide to help.
What is Lasting Power of Attorney (LPA)?
There is a great deal of attention directed towards the importance of having a Will, as without one, your estate will be distributed according to default intestacy laws – which may not be in line with what you or your family would want.
However, it is just as essential to have a registered lasting power of attorney (LPA). If you fall ill and can no longer manage your own affairs, but do not have an LPA, your family will have to go to the Court of Protection to gain the legal right to make decisions on your behalf – a process that can be expensive and slow.
As part of the Mental Capacity Act 2005, LPA was introduced in 2007 to replace the previous enduring power of attorney system from 1986.
Power of attorney (POA) allows one person to give another the legal authority to make financial or medical decisions on their behalf, but lasting power of attorney (LPA) transfers specific decision-making powers to the named parties in the event that the person loses the mental capacity to make decisions for themselves.
A property and affairs LPA can cover property and financial management, while a health and welfare LPA can cover medical treatment and care arrangements.
Lasting powers of attorney documents (LPAs) create an ongoing agreement without an expiry date, but before they can be legally implemented in England and Wales, they must be registered with the Office of the Public Guardian (OPG).
Why is the LPA legislation changing?
It is best to register an LPA as soon as it has been prepared, rather than waiting until your attorney needs to act for you. This involves signing the paperwork and sending it to the OPG, along with paying a fee of £82.
Currently, it can take up to 20 weeks to process an LPA registration, even if there are no errors. If there are mistakes, under the existing paper system, documents must be posted back and forth to correct them, wasting a lot of time.
The legislative amendments that will improve the paper application system and implement a new digital application system for online registrations will make registering LPAs and obtaining certified copies much simpler and faster.
More than 6 million LPAs are registered each year, with the OPG handling more than 19 million pieces of paper. Streamlining the paper process and introducing an online alternative will reduce processing time and paper waste, while maintaining the postal option for those who are not able to use the internet.
These reforms will also introduce stricter identity checks on those applying for LPAs, verifying official identification documents to prevent fraud.
When will online LPA registration be available?
As extensive testing will be required to make sure the new systems are usable and secure, there is no information yet on when the changes will actually come into effect – but more details will be published in the coming months.
Those who do not have an LPA should not wait until the new technology is in place before taking this vital action, as accidents and illnesses can happen at any time, and it could be a while before the new processes are in operation.
Ideally, people should have an LPA alongside their Will, as part of a well-rounded independent financial plan for their future and their family’s future.
Setting up an LPA can give you peace of mind that someone you trust will be in charge of your affairs if the worst should happen – as can setting up a Will and probate management to control the distribution of your assets when you pass away.
If you require professional financial advice or probate services to help with your family financial planning, gbac can help. Contact our Barnsley accountants
by calling 01226 298 298 or emailing info@gbac.co.uk to find out more.