LPA overhaul aimed at preventing fraud and abuse

20 July 2021

The Government is set to overhaul the lasting power of attorney (LPA) process under major reforms announced on Tuesday, aimed at preventing fraud and abuse.

An LPA is a legal document which allows people to appoint someone else to make decisions about their welfare, money or property if they were to lose capacity in the future.

The number of LPAs has increased substantially in recent years to more than five million. However, the process of making one retains many outdated features that are over 30 years old.

The Ministry of Justice and Office of the Public Guardian (OPG) have launched a 12 week consultation that will examine the entire process of creating and registering an LPA, with a view to boosting the OPG’s powers to prevent fraud and abuse.

The consultation will look at whether the OPG’s remit should be expanded to have the legal authority to carry out further checks such as identification verification and how people can object to an LPA and the process itself, as well as the right time for an objection to be made.

It will also explore how technology can be used to reform and speed up the process, although it will retain paper-based services for those unable to use the internet.

Justice minister Alex Chalk MP said: “A lasting power of attorney provides comfort and security to millions of people as they plan for old age. These changes will make the service quicker to use, easy to access and even more secure from fraud.”

Rachael Griffin, tax and financial planning expert at Quilter, welcomed the announcement.

“It is pleasing to see the government put the wheels in motion to upgrade the system for people to register an LPA and help combat the scourge of scams that we are unfortunately becoming all too familiar with.

“The pandemic had a huge impact on the number of LPAs being registered and it appears to be a slow march back to what we would consider pre-pandemic levels. It does remain a concern should we not get back to those pre-pandemic levels as this will mean numerous families are being left exposed to dangers that are becoming increasingly sophisticated and harder to spot.

“It is hoped the Office of the Public Guardian has used the pandemic to look at where the process can be streamlined and made easier so people can get an LPA in place with minimal fuss. These changes must also include raising awareness with the public at large. Far too few people are aware of LPAs and their benefits, so any overhaul must seek to improve knowledge of them and how to go about attaining one.

“While this consultation is clearly a step in the right direction, it is important, however, that people do not wait until a new system is in place. An LPA can only be registered while you have mental capacity – once you’ve lost capacity it is too late. While the conversation with family members can be hard and the process time-consuming, it must be put to the top of the to-do list or risk losing this vital avenue of protection.”

Kim Jarvis, technical manager at Canada Life, also supported the Government consultation.

Jarvis said: “This is a real step in the right direction by the Office of the Public Guardian. The LPA is already an unsustainable process in today’s society and will become increasingly outdated in years to come.

“Currently there is a delay of about 12 weeks for people to get LPAs registered and this consultation will assess the possibility of creating a digital fast track service for families who need to quickly set up an LPA for a relative who has suffered a sudden change in their health. It will also look at making the process of objecting to an LPA simpler, as well as introducing new safeguards to protect against fraud and abuse.

“Lasting powers of attorney create a peace of mind around the safety and security of family finances. Just like creating a will or nominating a next of kin, LPA’s should be viewed as an integral part of long-term planning.”

[Main image: scott-graham-unsplash]

Professional Paraplanner