Changes Bring LPAs Into Modern Era – But At What Cost?

The Office of the Public Guardian (OPG)’s plans to raise awareness of lasting powers of attorneys (LPAs) have the potential to increase elderly financial abuse rates, lawyers are warning.

The OPG’s plan, published on June 13, includes finding out more about the public attitude around LPAs, developing a proposal for paperless LPAs and launching an online service for third parties to use an LPA.

There are currently 3.75m LPAs on the OPG’s register, with the government body hoping it will raise awareness of the benefits of an LPA with a targeted campaign to encourage people to sign up.

While an LPA can be made at any age, the announcement comes amidst growing concern over an ageing population crisis. Alzheimer’s Society recently estimated the number of people living alone with dementia will double from 120,000 to 240,000 by 2039, leaving them vulnerable to unscrupulous persons if they do not have regular contact with friends or family.

Dementia diagnoses are also increasing, with new NHS figures showing nearly 454,000 people aged 65 and over have been diagnosed with dementia, a record number, and that the number of diagnoses has increased 7% in three years.

Experts at leading national law firm Irwin Mitchell warn that while the knowledge gap on planning for later life remains, financial abuse will remain an issue no matter what improvements are made.

Expert Opinion

“The OPG is absolutely right that LPAs should be as ingrained in the public psyche as driving licenses, just as much as we believe financial planning for care home fees should be as common as saving into a pension.

“A lot of the OPG’s proposals focus around bringing the process into the twenty-first century, which is much needed for many areas of the law in order for the public to properly engage with the need for an LPA. However, there will always be risks associated with this, particularly as public engagement with planning for later life is so sporadic.

“A serious consideration around going paperless is that there will be no need for the person taking out the LPA to sign it. This is a massive risk for financial abuse as it would then be possible for an LPA to be prepared without the person really knowing that it was happening, paving the way for fraudsters and even well-meaning but misinformed family members to take over their affairs.” Kelly Greig - Partner

Later life specialists at Irwin Mitchell also warn that while making LPAs more accessible for people by introducing online applications, it means people are missing out on vital legal advice which can at best result in errors and at worst create a catastrophic situation where all assets are lost through mismanagement or criminal activity.

Kelly added: “With modernisation comes the need to make sure the proper safeguards are in place in order to protect the elderly and vulnerable from financial abuse.

“I believe one way of solving the problem would be to ensure it is mandatory for people to take advice and then for their attorneys to take advice when they begin to act, much like with a pension transfer out of a final salary scheme where you have to take financial advice before you are allowed to do the transfer.

“We hope that the OPG considers all angles as it progresses with its modernisation of the LPA process and continues to put the people who will be affected at the core of its ethos.”