Financial institutions not recognising LPAs, consumers warned
Banks are among the financial institutions that are sometimes failing to recognise Lasting Power of Attorney (LPA).
Just 10% of people have currently arranged power of attorney – a vital document used to take control of another person's affairs when they lose capacity, such as through dementia or a serious accident. As a result, Saga Legal Services is urging banks and other financial institutions to review their procedures to ensure customers don’t encounter problems when trying to use an LPA.
Without a power of attorney, making decisions on another person's behalf can be extremely costly and time-consuming, not to mention stressful for all involved. Yet even those with power of attorney are finding it difficult to use it in practice, with representatives from some organisations not initially understanding what it was, or how it worked. This adds another layer of stress to what is already an extremely fraught time.
According to Saga Legal Services, there is no reason why an LPA shouldn't be immediately accepted by a financial institution and senior executives need to investigate this problem further. As LPAs become more widely known, this problem is only set to increase, the legal service provider has warned.
Those who have trouble using a power of attorney, in particular when using certified copies of the document, are advised to persevere and to insist on speaking to the relevant department until they find someone who can help. In the event that this does not resolve the situation, people can contact the branch manager or the Financial Services Authority to complain.
The issue is compounded for people who have made Enduring Power of Attorneys (EPAs) which were replaced by LPAs in 2007. This is because the EPA would be at least seven years old, and thus even more likely to be unfamiliar to bank staff.
Those with either LPAs or EPAs are advised to review them regularly to check that they still make sense for their circumstances. Things to look out for include: an attorney passing away or leaving the country, a change in relationship to the attorney (e.g. divorce or a falling out), or the decision to change from appointing joint to several attorneys, and vice versa.
While LPAs replaced EPAs, the two are not identical. While an LPA can cover financial and property, as well as health and welfare, an EPA only covers financial and property. Those with EPAs are encouraged to consider making a health and welfare LPA to run alongside their EPA to cover off all eventualities.
"People are growing more aware of power of attorney which is really good news as conditions such as Alzheimer's and dementia are on the rise," says Emma Myers, Head of Wills, Probate and Lifetime Planning for Saga Legal Services. "Yet it's concerning to hear that people are sometimes struggling to use their power of attorney when they need it, which must be a distressing and frustrating experience. The very point of an LPA is to allow people to deal with another's affairs should they lose capacity, and whether it's a lack of training on the subject, or faults in policy, the issue needs addressing."