The need to have their affairs in order has been highlighted for many over the last two years. Many have realised the importance of, and need to put in place, either a Property and Financial Affairs Lasting Power of Attorney (LPA) or a Health and Welfare LPA during the pandemic.
However, it seems that for every person who put in place an LPA, another two decided against it. Data from the Ministry of Justice has shown a considerable fall in LPAs between 6 April 2020 and 5 April 2021. In 2020-21, LPA registrations were recorded at just over 635,000. However, in the previous year the number of registrations came in at a record high of 866,272.
What is a Lasting Power of Attorney?
In contrast to a will, an LPA comes into use when the author is still alive and decisions around their finances or health and welfare need to be made for them when they cannot make these decisions for themselves.
Having an LPA allows you to choose someone you trust to make decisions on your behalf. There are two types:
- A Property and Financial Affairs LPA, which gives your attorney(s) power to deal with your property and finances as you choose; and
- A Health and Welfare LPA, which allows your attorney(s) power to make ongoing welfare and health care decisions when you are unable to do so yourself. You can also decide whether you want them to be able to give or refuse consent to life-sustaining treatment.
With the perpetually changing environment of the pandemic, LPAs have understandably come into their own in helping many people and their families make decisions for those that cannot, therefore avoiding a costly, time-consuming and often stressful court application.
The rise and fall of the LPA
Since the introduction of an electronic application process in 2015, the UK saw an increase of 84% in the number of applications over the following five years. Therefore, the sudden drop in 2021 will have come as a surprise to most private client advisers.
This recent lull has not yet been clearly explained, but it could be argued that a shift in process on the part of solicitors' firms and the courts during the pandemic could have created a backlog when combined with a significant surge in applications.
In July, the Ministry of Justice and the Office of the Public Guardian (OPG) carried out a 12-week consultation on proposals to simplify and modernise the LPA application process. This unsurprisingly involved looking at how technology can be used to reform the process of:
- improving access
- speeding up the service
- widening powers to legally check identities and stop or delay any registrations that raise concern.
It also looked at simplifying the process for objecting to the registration of an LPA.
It will be interesting to see what changes lie ahead. If this recent drop in application numbers is down to a backlog in the system, it may be reasonable to anticipate a timely pickup in another year’s time. If the problem is rooted more deeply than that, these changes to the application process may encourage more people to take the step and get their affairs in order, especially as we head into yet another wave of the pandemic.
Taking a step back, the pandemic may very well have accelerated reform already in the pipeline. The forced move to digital resources, as in-person execution services have been so hard to achieve, may have forced providers to ensure their digital resources are accessible, safe and easy to use.
If you have any questions about LPAs, wills or getting your affairs in order, please reach out to our private client team in person at our Kingston, Putney or Bedford Row offices, or online via our website.