The risks of using the government’s latest online tool have made headlines this week as the highly respected group ‘Solicitors for the Elderly’ published their latest findings into the pitfalls of ‘do it yourself’ Lasting Power of Attorney (‘LPAs’). The government is determined to save money and make the country ‘digital by default’ but what of older and vulnerable people who need support and protection?
You will find a lot of information about making an LPA as you explore our website. LPAs are important and powerful legal documents which allow you to choose one or more individuals (your ‘Attorneys’) to handle your affairs in the event that you are no longer able to do so yourself. Attorneys are usually family members, trusted friends or sometimes solicitors. There are two types of LPA – one which relates to property and financial decisions and the other which focuses on health, welfare and care decisions. Knowing that your affairs will be properly managed if you become vulnerable in the future provides important peace of mind for you and your family.
‘Do it yourself’ legal kits are easy to find on the high street and they are cheap too. In May 2014, the Office of The Public Guardian (the ‘OPG’) – the state body responsible for registration of LPAs launched an online portal which allows anyone to create an LPA without involving a legal advisor. Since the OPG’s portal went live, there has been a 35% rise in the overall number of applications to register LPAs. Over a quarter of all applications in 2015 were made using the online service, and the OPG has set a target for 30% of applications to be made in this way.
So why would you ‘do it yourself”? The usual motivation is financial – to save on solicitors fees. DIY kits usually cost less than £20 (not including the separate fee that must be paid to register the LPA with the OPG) and the OPG’s online portal is free to use (again the £110 registration fee must be paid separately). Our fees vary depending on the circumstances although usually we charge a fixed fee. Most solicitors charge a few hundred pounds on top of the registration fee. It is reasonable for you to ask what we add over and above what you can do yourself by just filling in the forms online.
There are serious risks associated with the ‘DIY’ approach. Firstly, the documents may not be legally sound and if this is only realised at a future date when the LPA needs to be used, a slow and expensive court application may become necessary. The problem is that none of us knows what we do not know! The forms are more complex than they appear at first glance and often in the case of the DIY kits you buy, they come with copious guidance notes. If the forms are not completed correctly then they can be rejected by the OPG and a further charge (either a £55 repeat application fee or a new application fee of £110 per document) is charged for resubmission. In August 2016 alone over 13,000 LPAs were rejected at the registration stage. It is very easy to tick the wrong box and that’s the tip of the iceberg with where things can go wrong. Arrangements which are unworkable in practice may not be identified and other useful instructions and guidance is often missed or framed in the wrong terms.
Secondly sometimes LPAs pass through registration but still include errors. This may mean that the document is rejected by banks and other service providers at the time when it is needed the most.
Thirdly (and sadly), the scope for fraud and undue coercion is far greater using the DIY method. We act as an important safeguard against such risks. Without legal advice, check and balance, it is far easier for an LPA to be falsified, or for you to create a document that you do not fully understand and may not be comfortable with. We advise Attorneys about their responsibilities too so that they understand the job they may need to do. Get it wrong on any level and an application to court becomes the likely outcome. DIY is so often a false economy. The potential consequences are nowhere near as serious but I sometimes say to clients that ‘ I could cut my own hair. BUT I WOULDN’T’.
Please contact us to discuss making a Lasting Power of Attorney. Vicki McKenzie is a full accredited member of Solicitors for the Elderly and also a member of STEP (The Society of Trust and Estate Practitioners)