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7 Jun 2022

Power of attorney reforms: will delays be reduced?

Changes will also include new safeguards to protect against fraud 
Power of Attorney system

The process of managing your loved one's affairs should soon become simpler, as the government has recently announced reforms to the power of attorney system.  

Power of attorney (POA) is a legal document where one person gives another the power to make financial decisions on their behalf in case they lose mental capacity. 

Earlier this year, Which? research found widespread confusion about how the process works, and that the system was in desperate need of improvement.

Here, Which? explains the proposed changes to the lasting power of attorney (LPA) system and when people can expect them.

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Why does the POA system need changing?

Despite the peace of mind it can bring, only one in seven (15%) people have granted someone else power of attorney over their affairs, according to our survey of 2,000 people in November 2021. Our research suggests that a lack of awareness and an outdated, difficult-to-navigate system are to blame.

The most common form of POA is lasting power of attorney (LPA). There are more than six million registered LPAs in place, but the process of making one still requires many paper-based features, in a process that's over 30 years old, according to the Office of the Public Guardian (OPG). The process leaves the OPG handling more than 19m pieces of paper a year.

But the reforms will do away with all this, introducing new identification checks to protect vulnerable people from abuse or fraud, and allow people to apply for LPA completely online for the first time - which could slash the registration time down to as little as two weeks. 

A consultation, 'Modernising Lasting Powers of Attorney', was opened last July by the government and sought comments on how to make the service more efficient, while maintaining safeguards. 

It looked into how to improve the witnessing process, how to improve the process of third parties, such as banks, accepting LPAs. 

The response was published on 19 May and sets out the government's intended next steps. 

The government said the proposals were developed with various stakeholders including Age UK, the Law Society and the National Mental Capacity Forum to ensure they work for those who rely on LPAs to manage their affairs in later life.

  • If you'd like to set up a power of attorney, for yourself, or someone else, Which? Wills can help - and until the end of June 2022 you can save 30%.

What will POA reforms change?

Under the new system, it will be possible to create an LPA completely online - bringing it in line with other government services, such as applying for divorce. 

Although the OPG introduced a digital tool in 2013, the final stages of the process, including signing, witnessing, attesting and delivering the LPA must be completed on paper. 

The government said digitisation of the system will help reduce errors from donors, attorneys, etc, by ensuring they are picked out and resolved early in the process. 

This should slash waiting times, which is essential, as the process can currently take up to 20 weeks. 

It also said reforms will improve the efficiency and sustainability of the organisation, and reduce its carbon footprint.

Several responses to the consultation raised concerns over the difficulty of trying to use an LPA with third parties, such as banks and healthcare professionals.

Although a new digital 'Use a lasting power of attorney' tool was launched in June 2020, allowing attorneys and donors to share the details of their LPAs with third parties online, in a small number of cases the physical LPA (or a certified copy of it) still needs to be shared.

The OPG said it will continue to improve the service and reduce these instances.

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Paper system will also remain in place

A paper system will remain in place, following the Law’s Society’s concern that many vulnerable people may rely on it. 

In response, The Law Society president Stephanie Boyce said: ‘We are pleased the government is looking at proposals to improve support for those who will struggle with using digital channels, as more needs to be done to ensure the reforms do not negatively impact vulnerable, disabled or older people.’

New safeguards to protect against fraud and abuse

As part of the new POA process, there will be a strengthened verification process to prevent abuse and fraud. 

This will involve new identification checks, requiring official documents or information, such as a driving licence, passport or Government Gateway account. 

The government will also look into how a new digital system could improve the witnessing process and make it simpler. This will hopefully give donors more time to focus on important decisions, such as who they are giving powers to, and the scope of those powers.

What did the consultation reject?

The government rejected the idea of introducing a fast-tracking service, which would benefit people who have an urgent need for a LPA. This was due to fears it would slow down the standard service for everyone. 

It also rejected the idea of merging financial and health LPAs. 

Currently, a property and financial affairs LPA gives your attorney the power to make decisions about your money and property, such as managing your bank accounts, paying bills, collecting a pension or benefits and if necessary, selling your home.

By comparison, a health and welfare LPA gives your attorney the power to make decisions about your medical care, life-sustaining medical treatment, moving into a care home and your daily routine. 

The government said it would not merge these different types of LPA, but it would consider how it can remove the duplication of data entry where information is repeated across both types.

When will the reforms come into effect?

There's no specific date for the reforms yet. The consultation response said the government intended to bring forward legislation ‘when parliamentary time allows’. It will have to amend legislation in the Mental Capacity Act 2005. 

Which? has contacted the OPG to ask for a more specific time frame for when we can expect the changes to come into force.

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When should you set up an LPA?

Setting up an LPA can give you peace of mind that someone you trust is in charge of your affairs.

If you're facing an illness, or believe your mental capacity might deteriorate in future, it's worth thinking about who you would like to handle your affairs.

If a POA isn’t set up before you lose mental capacity, it can lead to complications if you (or a loved one) have difficulty looking after your own finances in the future, or if you will need care or support arrangements to be organised.

For this reason it’s best to organise a POA sooner rather than later.

  • If you'd like to set up a power of attorney, for yourself, or someone else, Which? Wills can help - and until the end of June 2022 you can save 30%.