There are concerns over a significant drop in the number of registered Lasting Power of Attorneys during the pandemic.
Families are encouraged by professionals to engage with estate planning sooner rather than later due to inheritance tax costing families dearly when a person dies and their assets are being passed down. But evidence has emerged that families are choosing to ignore the importance of asset planning.
Lasting power of attorneys (LPAs) are important for estate and financial planning but following a disruption to the process for applying for them during the pandemic, figures reveal there has been a massive decease on the number of LPAs registered over the last 12 months or so.
Quilter, the financial advice and wealth management company, recently submitted a freedom of information (FOI) request to the Ministry of Justice. The FOI revealed there was a 30 percent drop in the number of LPAs registered between April 2020 and February 2021, compared to the same period the previous year.
Despite the numbers recently improving it is still not up pre-pandemic levels.
Rachael Griffin, a tax and financial planning expert at Quilter commented. She said:
“At the beginning of the pandemic everyone rushed to figure out how they could continue to offer services that previously required physical contact.
“Things such as getting a wet signature became problematic. In the instance of applications for Lasting Power of Attorney it took the Office of the Public Guardian (OPG) about a month to produce guidance on how to apply in the Covid-19 environment.
“On top of this, the OPG expressed they were seeing large levels of enquiries and it was taking longer than usual to process applications. It is no wonder we saw the year-on-year level of registrations drop by 70.5 percent for the month of April alone.
“While numbers still haven’t returned to their previous levels, they are getting closer and it is encouraging to see that people are getting the much-appreciated piece of mind that having an LPA entails.
“For those who were put off by the difficulty of registering an LPA at the beginning of lockdown, or haven’t had the chance to have what can be a difficult conversation, you must put the task back at the top of the to-do list. A LPA can only be registered while you have mental capacity – once you’ve lost capacity it’s too late.”