The number of people establishing a legal safety mechanism in case they get sick is increasing, but last year almost 51,000 applications were rejected.
About 30,200 financial and 20,700 health and welfare durable powers of attorney were rejected due to errors such as misspelled names, missing or illegible information and conflicting instructions.
Applications for LPAs, which appoint a trusted family member or friend to take charge of your finances or make medical decisions if necessary, rose 28 per cent to 1.37 million.
This is a 60 per cent increase on applications five years ago, according to figures from the Public Guardian’s Office which manages the system.
The rejection rate in 2023-2024 was 3.7 per cent, says investment firm Hargreaves Lansdown, which obtained the figures through a freedom of information request.
> Find common mistakes to avoid and a checklist for making requests below
Legal security in case you get sick – many people turn to lawyers to set up their LPAs and avoid mistakes
Sarah Coles, head of personal finance at Hargreaves, says: ‘There is a significant backlog of applications, and in 2023/24 each application took an average of 76 working days to process.
‘If you make a mistake, the agony will be prolonged, because the request will be rejected. It means that families have to be careful not to break the rules.’
He adds that there are changes in the works that should help streamline the process and mean more can be done online, but a date has not yet been set for this.
“It will include stronger identification checks and change the system so that instead of the donor (the person appointing the solicitor) or the solicitor being able to register the LPA, only the donor will be able to do so,” he says. .
“You’ll have to make sure you know what this means for you when the rules come in.”
Many people use lawyers to set up their LPAs and avoid making mistakes. Costs vary widely, but you can expect to pay between £300 and £400 for help with an LPA, with deals available if you want to get a finance and health and wellbeing LPA at the same time or if a couple is setting them up together.
However, the bill may be higher if you have complicated issues. You will also need to pay £82 per LPA to register them with the OPG.
Without an LPA, families may find themselves excluded from a sick relative’s finances and forced to apply for vice. This involves a complicated court process and fees running into many thousands of pounds.
People who have an old Durable Power of Attorney for Financial Matters established before 2007 are advised to consider changing to an LPA.
An EPA can only be registered in a lengthy process after you become ill, but an LPA can be registered at the time you set it up and then take effect immediately if it is needed later.
Holly Chantler, director of the Association of Life Lawyers, says 50,000 LPA rejections over a year equates to around 137 a day.
Holly Chantler: A common problem is the use of pencil or correction fluid, which are not allowed. Only blue or black ink should be used.
“Application processing times can take up to 16 weeks, even when everything is completed correctly.” she says.
‘Any mistake can cause significant delays, so it’s essential to get it right the first time. LPAs cannot be used until they have been registered and if the person who created the LPA no longer has the capacity to create a new LPA this can cause significant problems.
Chantler says a common mistake is using the wrong form. Be sure to use LP1F for estate and financial matters and LP1H for health decisions, check that they are the latest versions and do not mix pages from both.
“Another common problem is the use of pencil or correction fluid, which are not allowed,” he adds. “Only blue or black ink should be used, and any errors should be carefully crossed out, corrected next to the error, and initialed by the person making the amendment.”
She says to always use full names, because using initials or omitting details is a common reason for rejection.
Chantler explains the order in which people must sign, which is essential: first the donor, the witnesses, the certificate provider, the solicitors (who must also have their signatures witnessed) and then the person registering the LPA again.
‘You must ensure that your witnesses are eligible. For example, a lawyer cannot witness the signature of the donor (the person making the LPA) due to a conflict of interest.’
Twelve Common Powers of Attorney Mistakes to Avoid
Sarah Coles from Hargreaves Lansdown compiled this summary of the typical mistakes people make when applying for an LPA.
1. Spelling names wrong
Identification checks will fail if the name is misspelled. They can also fail if you have mixed up the order of the first and middle names.
2. Login in the wrong order
There are five impressive sets of signatures you need on the application, and they must be done in the correct order. If the dates of the signatures show that they were signed out of order, it will be rejected.
3. Missing information
You need the complete names, addresses and dates of birth of the donor and attorneys. You must also complete each section.
Sometimes people don’t fully understand the section about how they want lawyers to act, so they leave it blank. This will result in the request being rejected.
4. Illegible information
If they can’t read your handwriting or understand your corrections, they will reject it.
Sarah Coles: There is a significant backlog of LPA applications and in 2023/24 it took an average of 76 working days to process each one.
5. Bad corrections
If you make a mistake on the form, you must cross out the mistake, correct it, and then initial it. It must bear the initials of the person who made the mistake. If you use correction fluid or do not initial the correction (or the wrong person does it), it will be rejected.
6. Poor notifications
Part of the registration process means notifying specific people that you have said you will tell them. There is a specific form that you must send to each of them.
If you are doing a health and wellbeing LPA and a financial LPA, and you are notifying the same people, you will need to send two forms to each of them, one for each LPA, because they are treated as separate applications.
7. Confusing instructions and preferences
Instructions specify what your lawyers must do and preferences are those things you would like them to do, so language is important.
If you include an instruction to use funds to benefit someone other than yourself (such as making gifts), it is likely to fail because it could conflict with the duty to act in your best interests.
It means it’s best to include this as a preference: something you’d like them to do.
8. Issue contradictory instructions
Be careful that the instructions do not conflict with anything else in the document.
If, for example, you have appointed lawyers ‘jointly and severally’ it means that they can make any decision alone or together, so you cannot include an instruction that says that one lawyer must do what the other says or that in the case of disagreements one wants to go with the majority.
9. Tell lawyers that they must act in the interests of others.
They act only for you, so they cannot put your partner or children first.
10. Trying to dictatee as replacement lawyeract
The form allows you to appoint substitute attorneys if something happens to the original attorneys.
However, it cannot give instructions as to when this should be done; For example, you cannot say that they must intervene when their lawyers are on vacation. Nor can a lawyer be given power to appoint a substitute.
11. Trying to give lawyers the power to change your will
This is not allowed, so the application will crash.
12. Adding the wrong type of instructions
If you add financial instructions to a health and wellbeing LPA you will fail, and vice versa. If you want them to be able to cover both, you will need both types of LPA.
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