Since 2014, it’s been possible (and straightforward) to make Lasting Powers of Attorney (LPAs) online.
An individual (the donor) logs onto the government website, fills out, prints and signs the forms in front of a ‘certificate provider’ and witness. It’s the certificate provider who confirms the donor has capacity to make the LPA, and is doing so free from any undue influence. A certificate provider can be either a professional with the ability to check a donor’s mental capacity, like a doctor, or a lay person who has known the donor for at least 2 years.
This process of making an LPA online sadly opens the process to abuse. In a recent case, an individual sought legal advice and appointed a trusted advisor as his attorney. The LPA, including the necessary powers and safeguards, was prepared by the advisor. Later, a member of the individual’s family created an LPA for the individual online and asked an unqualified neighbour to act as the certificate provider. The new LPA did not contain any powers or safeguards and revoked the existing LPA. The individual was elderly and didn’t know that their family member had created a new LPA.
Many elderly individuals feel embarrassed at being unable to follow things online. In that state, someone can easily be influenced by people with ulterior motives. Acting in conjunction with a certificate provider who doesn’t understand the legal tests an LPA can be made, giving significant control to another over someone’s assets.
Currently, attorneys must provide the original or a certified copy of an LPA to financial institutions when they want to use them. This process can take a long time. The LPA needs to be located and retrieved from where it’s stored and the location won’t be the same in each case.
In July 2020, the Office of Public Guardian (OPG) launched the new “Use a lasting power of attorney” service.
How it works
It doesn’t mean an LPA can now be made exclusively online – wet signatures are still required for now – rather, it’s intended to make the use of LPAs easier and more efficient. Now, once an LPA is registered, attorneys and donors are sent an activation key to create an online account. An attorney who then wants to use the LPA can simply log onto their account to generate a code to provide to the bank or other financial institution. The bank then uses that code to check the LPA is registered, and to obtain details about the LPA, so transactions can be completed accordingly.
Concerns about the digital system
With decisions that need to be taken urgently and in a world of increasing digitisation, this procedure might be beneficial but it will almost certainly come at a cost to the vulnerable.
In cases of financial abuse, time is of the essence. Where the original or paper copy LPA needs to be produced it affords time to intervene. If the original is kept with a professional, they can ask questions before releasing the LPA. If the donor keeps the original they can refuse to release it.
The online system may be unfamiliar to some donors. It can be accessed and used by the attorney only, and can totally exclude the donor. This seems contrary to the basic principles of the Mental Capacity Act to maximise the donor’s participation in decision-making and to canvas their views and feelings before taking decisions.
Furthermore, while this new system shall enable organisations to see the LPA is registered, they won’t have access to details about the donor’s preferences or instructions. The online summary shall simply refer to the LPA containing preferences, but no further details. While this should be a trigger for the organisation to then ask for the paper copy, it’s a concern that in many cases, this won’t happen. This could expose donors to financial abuse, especially whose preference might be for a LPA not to be used unless they lose mental capacity to make financial decisions themselves.
What would be welcome is a system which keeps an account and record of the value of each transaction carried out by an attorney, and where those over a certain threshold trigger OPG oversight. In short, bringing the supervision of LPAs in line with how Court of Protection deputyships are managed. Instead, the new “Use a lasting power of attorney” service seems designed to simply rubber stamp transactions, without involving the faff of paper or even the donor. This is a worry.
The OPG’s desire to modernise the system is understandable; however, this must be done while also safeguarding those who are vulnerable and whose finances may be the subject of abuse. This must be at the heart of the system.
Furthermore, in its drive to have everyone sign up to a LPA, the OPG on its website is still stating, “You don’t need a lawyer to make an LPA, unless you have unusual or specific requirements.” With respect, we strongly disagree with this, it represents a gross underestimation of their importance, and is dangerous messaging that opens the vulnerable to financial abuse.
Making a property and affairs LPA involves an enormously important decision in giving another person control over your wealth, which you’ve likely spent your lifetime building. They also involve a number of responsibilities, duties and limitations that many attorneys and donors don’t know about. Using a solicitor adds an extra layer of expert knowledge and protection, offering you peace of mind that your affairs will be taken care of.
Our expert team of lawyers has a great deal of experience in LPAs, and can help you make a plan that ensures your wishes are followed and your best interests are looked after. We can offer support and clear advice, while helping you at every stage of the process. LPAs should be made following legal advice and understanding.
For more information on our Powers of Attorney services, click here.
Published: September 2020
A monthly briefing from Irwin Mitchell
September 2020
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