The Digital Revolution of Lasting Powers of Attorney
The Ministry of Justice and the Office of the Public Guardian (OPG) are currently reviewing how to modernise Lasting Powers of Attorney so that they are fully digitalised. The push has come due to Covid 19, but is it too quick?
How Powers of Attorney have evolved
The Enduring Powers of Attorney Act 1985 was passed to create a power which could survive incapacity. We could make an Enduring Power of Attorney (EPA) to appoint Attorneys to act for our property and financial affairs if we required assistance, or if we lost our capacity our Attorneys would deal with our financial affairs. This document was signed and witnessed by the person making the power of attorney and also the Attorneys. There was no formal registration of this particular Power of Attorney in order for it to be used. It could be used by Attorneys straightaway, with the persons consent. It only needed to be registered if the person who made the document lost capacity. The issue with the EPA is that Attorneys were using them without consent of the donor and there was no formal register of who made these documents. Due to the level of fraud, since 1st October 2007, when the Mental Capacity Act 2005 came into force, it was no longer possible to create an EPA. Pre-existing valid EPA continue to be valid.
Lasting Powers of Attorney
Lasting Powers of Attorney (LPA) replaced EPAs and are governed under the Mental Capacity Act 2005 and the Lasting Powers of Attorney Regulations 2007.
There are also two types of LPAs, one for your property and financial affairs, and you can also have one in place for your health and welfare. Both types allow you to appoint Attorneys who you choose deal with the property and financial affairs when you require assistance or you have lost capacity. In terms of your health and welfare, your Attorneys can assist with your care, or what treatment you should or should not have; including life sustaining treatment, when you have lost capacity. This can be temporary or permanent, for example: if you are in a coma, your Attorneys can discuss your treatment with the health professionals. As soon as you regain consciousness and you are compos mentis the Attorneys power sits dormant again.
The start of the digital era 2014
In 2014 the OPG started online applications. Although the LPAs could be submitted online, all parties are to still sign the LPAs and the original is still submitted to the OPG. Although the importance of putting LPAs in place was a good idea, the online application era provided donors into believing that they were completing just a form, but in fact a LPA is a legal document and the implications of not completing the document correctly make cause issues for the donor and or their Attorneys in the future.
The LPAs may not include relevant clauses which lawyers would advise to include to ensure that the Attorneys have access to all their finances and they are able to obtain the relevant financial advice on their behalf. Further to confirm that the importance of drafting he LPAs correctly in the first instance, as they cannot be amended once signed as once signed it is a Deed. This therefore means in order to cancel the LPA, it would have to be revoked.
Also the OPG is not authorised to give legal advice which means those who choose to use the OPG online service are completing the LPA documents at their own risk and, as stated above, the risks can be substantial.
Within the LPAs it was a requirement that the person making the LPA (the donor) had to notify at least 2 people that they were making an LPA and further advise as to whom they were appointing as their Attorneys. This was deemed as a safeguarding check to ensure that the donor was not under any undue influence or duress by making an LPA and appointing particular Attorneys; for example the donor being made to exclude a particular child, or partner. The provision for this requirement was no longer in April 2016 when many donors opted out if it as it was deemed not necessary. This was a concern to our profession since it was a safeguarding point, and a reason why EPAs could no longer be made.
Further in the LPA, a Certificate Provider is to complete section 10 of the LPA, which was a further safeguard method to prevent vulnerable people from giving a power when they lack mental capacity, or through fraud and/or pressure. The Certificate Provider signs the LPA to confirm that the donor under the purpose of the LPA and the scope of authority conferred under it and to ensure that there is no fraud or undue pressure used to induce the donor to create the LPA, nor anything else which would raise concerns.
In most circumstances we as lawyers, would act as the Certificate Provider having met with the client/donor and discussed and ensured that they understand the LPA and the implications and powers of the document
Step 2 to digital access
In 2020, Covid-19 pushed the OPG to allow access to registered LPAs by Attorneys and Donors via a gateway passcode. Once the LPAs are registered they write to the Attorneys to confirm and provide them with a individual passcode so that they can access a digital copy which can also be used to register with the donors financial institutions. Therefore now the Donor must ensure that they are happy for their Attorneys to have this access, although they should of course trust their Attorneys they are appointing in the first instance.
Final step, and maybe a step too far?
LPAs being completely digital! The question we ask as lawyers is: when will donors obtain the requisite legal advice when completing the LPA digitally? Further, who will be safeguarding the donor to ensure that they are aware of the implications of powers of making an LPA? Although this has not yet been approved by legislation, it is being discussed.
The concern is that the making of EPAs was abolished in 2007 due to fraud, and the concern for many lawyers is that digitalising LPAs completely is a step too far and may open the world to fraud again. If LPAs are moving to being fully digital, then there must be a need for safeguarding measures being put in place to ensure the donor is aware of the importance of LPAs: maybe that it is only professionals who are able to submit documents in this manner and for only professionals to act as a Certificate Provider, not someone the donor has known for at least two years. For instance, my neighbour has known me for over 2 years, but do they know that by signing as a Certificate Provider that, if at a later date the issue of capacity of the donor is raised, they will receive a letter from the OPG questioning the donors capacity at the time they signed the document? Also whether they were aware of the donors background? The neighbour was merely being neighbourly, and unlikely to knowingly know the implications of acting as Certificate Provider. How do they know what has been happening in the donors life? I could have been under undue influence by a family member or partner to make them my Attorney.
Another concerns lawyers have: is it stopping the donor from obtaining the appropriate legal advice before entering into a Lasting Power of Attorney, by completing the form online with no professional advice? Have they considered all the different options in relation to their Attorneys and how they should be appointed? Does the donor understand that if they appoint their Attorneys to act jointly, that if one of the Attorneys dies then their LPA ceases, unless they have made replacement Attorneys? Does the Donor release that if they appoint replacement Attorneys and they do not change how the Attorneys are to act and they appoint more than one, then the replacement Attorneys will automatically act jointly, which again means if one dies, they no longer have any Attorneys acting? Has the donor included instructions within the LPA which will allow their Attorneys to fully manage their affairs?
All these questions would be asked by us when we meet with client’s. If clients see LPAs as just a simple form and proceed to draft and submit their own LPA form online, it is a danger that the form does not raise these questions. As stated above, the OPG are not to provide legal advice and once submitted, it is a legal Deed.
If you would like further advice about Lasting Powers of Attorney – from creating an LPA to ensuring the viability of your existing LPA, then get in touch with our expert team. Call them on 01903 229999 or at info@bennett-grffin.co.uk.