A Lasting Power of Attorney (LPA) is a legal document that allows a person (called the donor) to appoint an individual, individuals, or a trust corporation to act as their attorney.
The attorney is appointed to act on behalf of the donor to make decisions or complete tasks for the donor. The attorney could be acting under the donor’s instruction or acting without instruction if the donor has lost mental capacity. The type of decisions the attorney can make will depend on which type of LPA they are appointed under, how the LPA is drafted and if there are any specific powers or restrictions in place. There are two types of LPA that can be drafted.
LPA for financial decisions – this LPA can be used to allow attorneys to complete tasks such as accessing bank accounts or dealing with investments or property; and
LPA for health and care – this LPA can be used to allow attorneys to assist with health care, medical treatment, daily matters such as diet or routine or assistance in choosing where the donor lives.
LPAs are critical documents and a key part of estate planning. An LPA can provide peace of mind that personal and / or financial affairs are being dealt with.
LPA Reforms
In 2023, the Office of the Public Guardian (the body that monitors the creation of LPAs) registered 848,896 LPAs. However, the LPA creation process is seen as outdated and has been called unfit for purpose, with the registration of LPAs currently taking 20 weeks.
To address this the Powers of Attorney Act 2023 has been passed with the aim to simplify and modernise the process of creating LPAs and allow other innovations such as: –
- Improved safeguards to prevent abuse and fraud;
- Changes to who can object to the creation of an LPA;
- Changes to who can apply to register an LPA; and
- A streamlined registration process.
The Powers of Attorney Act 2023 is an encouraging update to the process, but it remains to be seen whether it will reduce the current wait time for LPAs to be registered.
If you would like to discuss the creation or registration of LPAs with the Private Wealth team at Rothley Law, please contact us on 0330 016 9200 or email us at PWnewenquiries@rothleylaw.com