10 July 2023
New Freedom of Information (FOI) data obtained by Quilter, the wealth manager and financial adviser, shows that since 2018 well over 20,000 Lasting Power of Attorney (LPA) applications have been rejected per year due to mistakes, totalling nearly 128,000 to April 2023.
|
Rejected LPA |
Health and Welfare |
PFA |
Total |
|
2018-19 |
8,954 |
13,824 |
22,778 |
|
2019-20 |
9,919 |
14,538 |
24,457 |
|
2020-21 |
8,178 |
12,057 |
20,235 |
|
2021-22 |
12,889 |
18,365 |
31,254 |
|
2022-23 |
12,117 |
17,007 |
29,124 |
|
Five-year total |
52,057 |
75,791 |
127,848 |
In 2022, there were 777,741 total registered applications for LPAs but the figures from the Office for Public Guardian (OPG) reveal that this is still 8% lower than they were during the same period pre-pandemic in 2019 when 842,778 were registered. However, this has improved from them being 22% lower in 2020 and 16% lower in 2021 respectively.
The FOI data also revealed that on average in 2022-23 it took 91.5 working days to register and dispatch an LPA application, which is over four months.
The shortest period to register and dispatch an application was 20 days; this was for highly urgent cases and includes the statutory notice period.
While the longest period was 983 days in a case where it was necessary to refer the matter to the Court of Protection, which equates to over two and a half years.
Five common reasons why LPA applications get rejected
- Incorrect signing order: The donor, certificate provider or attorneys have not signed and dated the LPAs in the correct order – the donor must sign the LPAs first, then the certificate provider, then the attorneys, and thereafter, the person registering the LPA must sign again (either the attorney or the donor). Parties often sign the LPAs in the wrong order, which is not allowed.
- Missing information: This is often the date that the donor, attorneys or certificate provider have signed the LPAs, or sometimes their signatures have not been witnessed. The LPAs must be completed in their entirety before they can be submitted to the OPG to be registered.
- Incorrect witnesses: Parties often use witnesses to witness signatures who are not allowed to be used – for example, an attorney cannot witness the signature of a donor because there is a conflict of interest in doing so.
- Unworkable LPA requests: The donor might appoint attorneys to make decisions one way, and then include instructions to make them act differently, making the LPAs unworkable– for example, if you have three attorneys appointed in your LPA, and the LPA says attorneys should act ‘jointly and severally’, you cannot then include an instruction in the LPA to say that decisions are made by majority vote, as by acting jointly and severally, all of the Attorneys have equal power to act and make decisions.
- Not providing full names: Parties often submit LPAs without giving the full information required – for example, witnesses often cause an LPA to be rejected by not noting their full details on the LPAs– the witnesses must give their full name (including their full middle names), and not just their initials with their surname. This is important as banks and other financial institutions may refuse to grant the attorney access to funds if there are spelling mistakes or discrepancies in the documentation.
Sadly, particularly during times where finances are stretched, we can see an uptick in examples of LPA abuse where the appointed attorney misuses their authority or acts against the best interests of the person they are representing. This may include financial exploitation, coercion or undue influence or failing to provide proper care or disregarding their wishes.
It is essential therefore to take certain precautions such as choosing a trustworthy attorney who you trust implicitly and who has your best interests at heart. It is also wise to consider appointing multiple attorneys. You can appoint more than one attorney and specify whether they can act jointly or independently. This helps provide checks and balances. Also, if you only have one attorney and they die once you have lost mental capacity then the Court of Protection may have to appoint someone else who pay not have been your preferred choice.
As appointing an LPA is a huge decision it is wise to review it regularly as you can change or revoke an LPA if you still have mental capacity. Therefore, if you feel someone for whatever reason is no longer suitable you can change it. To help ensure applications go smoothly always seek legal advice from someone who specialises in LPAs to ensure you understand the process and potential risks.
Rachael Griffin, tax and financial planning expert at Quilter says:
“LPAs are a crucial part of financial planning and its worrying to see so many rejected over the past five years. We can only hope that following rejection people still went through the reapplication process. There is no getting around the fact that it can be a long-winded process and, in some cases, can take months to be accepted. However, the attorney will ultimately be taking on a huge amount of authority over someone’s life, so the Ministry of Justice and Office of Public Guardian are right to ensure they are thorough and spot any mistakes to help avoid problems down the road.
“It is a worry that the number of applications being accepted though is still yet to reach the pre-pandemic levels though and it’s important that any backlog is tackled as quickly as possible so as many people as possible can put in place an LPA.
“This is one of those tasks that easy to put off or put to the bottom of the to-do list. However, an LPA can only be registered while you have mental capacity – once you’ve lost capacity it is too late and while we can only hope for the best we should prepare for the worst.”
