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The dangers of off the shelf & online LPAs!

27th Nov 2016

The Office of the Public Guardian is heavily promoting their online digital Lasting Power of Attorney offering but here Claire Booth warns of its dangers.

What is an LPA? 

A Lasting Power of Attorney (LPA) is a legal document which allows a person (or "donor") to choose one or more individuals ("attorneys") to handle their affairs in the event that they are no longer able to do so themselves, for example if they lose mental capacity. 

The attorneys do not need to be legal professionals. They can be 

  • trusted family members
  • friends
  • lawyers

There are two types of LPA, which cover

  •  financial decisions
  • health  & care decisions

If you have both in place your attorneys will be able to make important decisions on your behalf in relation to

  • the management of your property
  • bank accounts
  • pay bills 
  • consider care plans & medical treatment

All LPAs must be registered with the Office of the Public Guardian (OPG) before they can be used. Health & Care LPAs can only be used once the donor has lost capacity. There are many issues to consider when creating an LPA, and great care must be taken when creating one. More information can be found by clicking this link - Lasting Powers of Attorney.

The rise of DIY LPAs

Traditionally, LPAs are made by instructing a qualified solicitor/legal executive. A small number are also made using off-the-shelf kits, which can be picked up on the high-street. A third way of creating LPAs was made available in July 2013 with the launch of an online service from the OPG. Using this digital service, which includes the OPG’s own set of guidance notes, individuals can also create and register an LPA without taking legal advice. 

However, there are a number of risks associated with any DIY method of LPA application: 

  • the resulting document may not be legally enforceable
  • the application forms are complicated to complete, and even with extensive guidance notes, it is easy to make mistakes
  • this can incur unforeseen costs – if the forms are not completed correctly, they can be rejected by the OPG and a further charge made for re-submission

In the period August 2015 to August 2016, over 13,000 were rejected. Even if mistakes are not picked up the LPA may later be rejected by banks, utility providers or medical professionals. 

Secondly, the individual making the application can more easily become a victim of fraud or coercion if a DIY method is used. A legal professional acts as an important safeguard when creating an LPA, and their removal from the process can lead to an LPA being falsified, or the donor being persuaded to sign something they do not fully understand or are not comfortable with. 

Finally, there is a real risk using DIY methods that the person creating the LPA does not properly express their wishes. It can be extremely daunting to think about what might happen if you lose the ability to make decisions for yourself. A vital part of a solicitor’s role is to provide clear & independent advice for an individual about their options and choices. Without this support, it is easy for someone to create an LPA that does not accurately reflect the way in which they want their affairs and welfare to be handled in the future. 

Claire Booth from the Brown Turner Ross Private Client Team commented:

"Many organisations now believe that by promoting its online service as a universally suitable way of creating an LPA, the OPG is potentially exposing many donors and their families to unacceptable levels of risk & may be compromising its ability to safeguard those who are most vulnerable. 

There are two ways in which this could happen

  • either by a donor being pressured to sign or agree to something that they do not understand or are not comfortable with, or
  • by a completely fraudulent LPA being registered in a donor’s name without their consent

The pressure of trying to get the whole process right with DIY applications is immense - even intelligent people find the process complicated and confusing without the benefit of legal advice. The scope for a donor to be coerced is significant, as many donors will complete the forms in consultation with their chosen attorneys, in whom they must place a great deal of trust. It is also generally older and vulnerable people who apply for LPAs, with the majority of new donors being between 81 and 90 years old.

Currently, a ‘wet signature’ is still required to complete the online application, but the OPG has recently announced a consultation with a view to removing this requirement, allowing a fully digital ‘e-LPA’ to become available in future. This is despite warnings from the Law Society about the risks associated with such a move.

However, the heavy promotion of their online service suggests that the OPG is more concerned with encouraging more people to take out LPAs, rather than safeguarding those that do. The OPG is actively trying to convince more people to use its online service, having set themselves a target for the service to comprise 30% of all applications.

With cases including such serious matters as donors’ homes being sold to attorneys and suspiciously large financial sums being transferred to private accounts, any increase in the number of safeguarding referrals and investigations is extremely concerning. The risks of outright fraud are traditionally low, but have risen as a result of more people attempting to create LPAs themselves. 

I believe that the risk of failing to understand the implications of an LPA & the basis on which they should be drafted is too great to do so without expert legal advice."

Your attorney will have full power over your finances & assets so it is vital that you make the process risk free - call Claire or Arthur Finlay for advice - 0800 195 7517.