4th December 2023 | Daniel Gibson | private wealth, tax planning, residential

Daniel Gibson, Legal Assistant in our Private Wealth team, examines The Powers Of Attorney Act 2023 which is due to take effect in early 2024, and which will usher in substantial changes to how LPAs are registered and safeguarded.

As part of The Sherrards Training Academy, we have asked our Legal Assistants and Trainee Solicitors to write articles to support their learning, and also to ensure they start to build on their own personal brand. This article has been fact-checked and proofread by Head of the Private Wealth department, Nicole Marmor.

Introduction:

In the realm of estate planning, Lasting Powers of Attorney (LPAs) hold equal significance to Wills as tools by which individuals can safeguard their autonomy and ensure their wishes are honoured.

The Powers of Attorney Act 2023 received Royal Assent on 18 October 2023 and signifies a milestone in the law surrounding LPAs. The legislation is poised to take effect in early 2024 and will usher in substantial changes to how LPAs are registered and safeguarded.

The Act comes in response to concerns surrounding complexities and inefficiencies permeating the current LPA system and aims to promote accessibility by enabling online registration.

What is a Lasting Power of Attorney?

An LPA is a legally binding document enabling the donor to designate a trusted person (or persons) as their legal representative. The attorney is authorised to act on the individual’s behalf in situations where they are unable to do so.

There are two types of LPAs, one pertaining to financial matters and the other to health and well-being. Many choose to have both in place. Both documents need to be registered in order for the attorney(s) to act. By registering a power of attorney, you ensure that you retain control over how your affairs are managed in the future, irrespective of your personal circumstances.

How will the Powers of Attorney Act change the current landscape?

The Act’s primary objective is to streamline the LPA process, making it more convenient whilst reducing the clerical errors traditionally associated with wet ink LPAs. LPAs will be able to be created and registered online which will (hopefully) significantly reduce the processing time.

Nevertheless, it’s not all ‘laissez-faire’ when it comes to the Powers of Attorney Act, considerable safeguards have been put in place with the aim of shielding vulnerable donors from potential fraud and abuse, attorneys are now being required to provide more comprehensive information regarding their relationship with the donor. Furthermore, to ensure compliance with these new measures the Office of the Public Guardian (OPG) has been granted increased authority to assess and challenge LPAs and a new criminal offense of LPA fraud has been introduced to fortify the measures.

Forecast for the future:

Cloudy with a chance of LPAs …

It is anticipated that there will be a surge in the number of people wishing to register an LPA due to the convenience of the digital registration process. Private Wealth solicitors are poised to play a pivotal role in facilitating this process, offering guidance on the recent amendments and potentially undertaking reviews of existing LPAs to ensure compliance with evolving legal standards.

The OPG is expected to provide online training specifically tailored to acquaint legal professionals with the new digital LPA registration process. Solicitors may consider integrating online resources and video conferencing services to streamline access to their LPA-related advice, adapting to the changing legal landscape to benefit their clients.