Changes afoot

The Ministry of Justice has recently released its response to the October 2013 consultation, ‘Transforming the Services of the Office of Public Guardian’ (OPG). The consultation is of significance to elderly client practitioners as it considered some fairly major changes to the way in which lasting powers of attorney (LPAs) could be made.

At present, an individual can make a separate property and financial affairs LPA and a health and welfare LPA. One of the significant aspects of the consultation was that the OPG sought respondents’ views on the possibility of introducing a ‘combined’ LPA covering both property and financial, as well as health and welfare decisions.

Having considered the responses received to the consultation, however, the OPG has now indicated that it will not be bringing into force a ‘combined’ health and welfare and property and financial LPA structure, for the time being at least. More user testing is being undertaken and the OPG will revisit this proposal in the future. Practitioners should be aware that this could result in a slight upturn in instructions if clients (or their professional advisers) were awaiting the outcome of the consultation before proceeding.

There were also a number of other proposals raised in the consultation, with particular emphasis on the launch of redesigned health and welfare and property and financial affairs LPA forms. Those forms will:

• Be aimed at encouraging donors to state when they wish their LPA to come into effect (i.e. giving the donor a chance to stipulate under what circumstances they would want their LPA to come into force and be used by the attorneys). Of course, in order for an LPA to be used by the donor’s attorney(s), it must have been registered with the OPG, but added flexibility must be a good thing, as long as it is clear.

• Include new language aimed at making the LPA forms easier to understand for lay donors. It is obviously imperative that, before making an LPA, the donor fully understands it and the effect that the document will have on them should their attorney(s) be required to act on their behalf at some point in the future, so any move for further clarity should be welcomed.

• Remove the requirement for a second certificate provider to be included in the LPA in certain circumstances. In my firm’s experience, the term ‘certificate provider’ often causes a lot of confusion when discussing LPAs with clients. When a donor signs their LPA, they must have a sufficient understanding of its nature and effect and they must, of course, not be pressurised into signing by a third party. The certificate provider’s role is to certify that they believe the donor to be making the LPA of their own free will, and that the donor has a sufficient understanding of it and its effect. In some cases, where a donor has chosen not to include any ‘persons to be told’ in their LPA, it is a requirement that two certificate providers sign it to ensure that the donor has sufficient understanding of it and its effect to enable them to sign the LPA. The proposal is to do away with the need for two certificate providers’ signatures in these cases.

• Amalgamate the main LPA form with the LPA002 application to register the LPA. Once a donor’s LPA has been signed, it must be registered with the OPG before it can be used by the attorney(s). In our experience, the majority of people take both steps at the same time and, from a practical point of view, it appears sensible for the registration form to be included as part of the LPA document itself. It also ensures that donors are clearly made aware of the need for the document to be registered before it can be used by the attorney(s).

Matthew Evans is a partner at Hugh James

He writes the regular vulnerable clients comment in Private Client Adviser