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14 July 2020 0 Comments
Posted in Opinion, Private Client

Lasting Powers of Attorney, and other options, during COVID-19

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Associate Mythili Bonham takes a look at Lasting Powers of Attorney and how the current delays in registrations due to COVID-19 don’t necessarily mean you can’t have control over your future.

You may have read articles in the press recently that The Office of the Public Guardian (OPG) is experiencing severe delays in registering Lasting Powers of Attorney (LPA) as a result of the COVID-19 pandemic.

What is an LPA?

An LPA is a legal document that allows an individual (known as the Donor) to appoint one or more people (known as Attorneys) to act on their behalf even in the event that they lose capacity to do so themselves. LPAs have to be registered with the OPG before they can be used which is an important safeguard but this can be problematic when you need someone to assist you with your finances straightaway. Of course, severe delays in the registration process may happen at the best of times but delays during the pandemic are causing even more concern and upset at an already stressful time.

There are some temporary work-arounds that we can put into effect very quickly while you wait for your LPA to be ready for you, but more on this later.

The two types of LPA

There are two types of LPA. The first is in relation to property and financial decisions and enables an Attorney to pay bills, deal with your bank and manage property or investments.

The second type relates to health and welfare decisions in respect of medical treatment, life sustaining treatment and where care can be received. It is incredibly important that any Attorney appointed is trusted implicitly to make the best decisions on your behalf for both your health and/or financial wellbeing.

Why is it important to have an LPA?

It has always been important to have an LPA in place to make sure that a person you trust (whether they are a friend, a relative or a professional) has the authority to assist you to make decisions or to make decisions on your behalf. However, due to the current COVID-19 pandemic it has been more important than ever. Social isolation, shielding and social distancing measures to combat the spread of the virus have meant that many elderly and vulnerable people are finding it extremely hard to access accounts and services. They are reliant on acts of kindness and support from friends and relatives but are finding that financial organisations (for the very good reason of safeguarding them) are refusing to deal with friends or relatives without express authority.

Also, it is important not to leave it too late because if you lose mental capacity and do not have a LPA then someone will need to apply to be your deputy to make decisions on your behalf but this can be a complicated and expensive legal process. We find that frequently people leave it too late to come to us to assist them as mental capacity has already become an issue or someone has suffered an unexpected accident or medical condition such as a stroke which did not afford them the time to get an LPA in place.

LPAs in the time of COVID-19

The process can be extremely problematic due to the current social distancing rules but we can assist with explaining how everything works and ensuring that the document has been signed properly (whilst adhering to social distancing rules) to ensure that there are no problems with registration.

The LPA comprises one document whereby the Donor and all of the Attorneys as well as a ‘certificate provider’ (i.e. someone who is willing to certify that the Donor understands the document and has the mental capacity to make the Lasting Power of Attorney) need to sign the document. The document must remain intact (i.e not be separated into sections) and cannot include pages that are scanned or photocopied.

Currently, you cannot use digital signatures (i.e. the document must be signed by hand by all the relevant parties). Also, an added complication is that the document needs to be signed in a very strict order. Of course, this all makes the process both lengthy and inconvenient. However, the OPG is emphasising that these safeguards should be complied with even during the pandemic to prevent potential fraud or abuse of the vulnerable.

When handling the document all parties should make sure that they stay two metres away from each other and wash their hands before and after handling the document. It would also be preferable for all parties to wear gloves and each party use their own pen where possible.

We are currently taking instructions over FaceTime, WhatsApp and Zoom from Donors which enable us to assess your capacity and ensure that you are not subject to any undue influence. Our clients have provided us with feedback that they find it reassuring to give us instructions face to face, (even though not in person,) to ensure they feel comfortable enough to ask any questions they may have or raise any concerns that they may have.  

At present, the OPG is asking people to delay the registration of LPAs while they are working through their backlog. Unfortunately, this is not of assistance to anyone who needs to appoint someone urgently to deal with matters on their behalf and with no end in sight to the delays it is becoming fairly urgent for most people who require assistance with their finances to have something put in place sooner rather than later.

Possible work-arounds

As I mentioned at the start, there are some temporary work-arounds that we can put into effect very quickly.

We can assist you with a ‘third party mandate’ in respect of the account(s) you wish your Attorney(s) to be able to have access to. A third party mandate can either be on a one-off basis (i.e. for one transaction) or on an ongoing basis (i.e. authority to assist with various transactions) until the LPA is ready for use. We will be able to help with the third party mandate whilst assisting you to draw up a LPA.

If you want to appoint a friend or relative to have access to various accounts and investments rather than one or two accounts it may be more suitable for you to execute a General (or ‘ordinary’) Power of Attorney instead of a third party mandate as this can provide support for more than just accounts and investments. Once again we will be able to prepare a General Power of Attorney for you at the same time as preparing a LPA. A General Power of Attorney is useful in the case of an emergency or an unexpected situation where access is needed on more than just bank accounts and perhaps in relation to property.

Neither a third party mandate nor a General Power of Attorney are suitable for long-term use as they become invalid if the mental capacity of the account holder deteriorates. It should be noted that third party mandates can be restricted to certain transactions on the account. The third party mandate may not give your friend or relative access to information regarding the account that you or they may need. Third party mandates can also be restricted by the bank with regard to the value of the transactions your friend or relative can make on your behalf. Therefore, they are not an advisable long-term remedy or as an alternative to a LPA but can be a useful tool whilst waiting for it to be registered.

If you have any questions for our Private Client team, please contact us today.

0800 923 2070     Email uspc.enquiries@roydswithyking.com

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