The pros and cons of the LPA

Wendy Scarr B.A. (Hons) TEP
0113 320 5000
wills@winstonsolicitors.co.uk

Soon after the Lasting Powers of Attorney came into existence there was widespread opposition from solicitors and clients alike with many arguing that change wasn’t necessary. Though there had been some abuse of the Enduring Powers of Attorney system there were many who felt that the introduction of LPA was a sledgehammer to crack a nut, creating more problems than it solved. There were complaints that a tiny mistake on the far more complex LPA form made it invalid so the whole process had to be redone once again and the registration fee paid again in full.

Though many worry about the cost of setting up an LPA and flinch at the thought of filling in a long and taxing form, the consequences of not taking action could persuade more to investigate LPA’s more thoroughly.

While the cost of preparing an LPA is prohibitive for some, compared to the alternative it is surely preferable? As already stated, if there is no LPA then the Court of Protection will appoint a “deputy” to act on the person’s behalf. The court application fee for this application alone is £400 but there will be many other expenses to take into account such as a medical report which will cost in the region of £500 and an insurance bond to cover the risk of mismanagement of funds. Payable every year this could amount to thousands of pounds while there is also a one-off supervision fee of up to £800.

So those deciding to have a lasting power of attorney drafted will certainly pay considerably less, and they will have lasting knowledge that their financial and medical affairs will be taken care of by those family members in whom they have the greatest trust.

Martin John, the Public Guardian, is sure that the short-term hassle will be more than justified in the long run. He said: “We have reduced the risk of errors through improved design, and have included guidance to make completion simpler. Reducing the LPA registration fee demonstrates our commitment to provide a cost-effective service and to encourage take-up of such an important safeguard.

“The hoops you have to jump through may be frustrating, but it is best to appoint someone while you are still in good health. Most people expect to need such a representative only in extreme old age, forgetting that road accidents, for example, can happen at any time.”

In comparing LPAs to EPAs, whilst it was perhaps fashionable to highlight the discrepancies in the new system in its first, teething months in operation, there are many advantages that LPAs hold over their predecessor. Notably, as has already been explained, they do not just relate to the donor’s financial affairs but also their health and welfare concerns including consent to refuse medical treatment. This has moved England and Wales closer to the position in Scotland where continuing powers of attorney already granted rights over health and welfare.

The new system was also seen to be an advantage in that it would help avoid some of the inevitable abuses that would occur when one person had control over another person’s money, even if they were of the same family. It was estimated that as many as 15% were abusing EPAs, taking money from the donor’s accounts to fund their own lifestyle.

However, those against the LPAs have several targets to aim at, notably the extra cost and the bureaucracy involved and whilst EPAs still exist for those who took them up pre-2007 comparison between the two will continue to be made.