Safeguarding against abuse of Lasting Powers of Attorney
The recent ITV Tonight programme "Elderly Theft: Robbing the Relatives" revealed a number of shocking stories where a family member appointed as an attorney under a Lasting Power of Attorney had abused their position and used their relative's money for their own benefit.
Arguments put forward by wayward attorneys who have misused LPAs are that they were going to inherit the money anyway or that their parent would have wanted them to have the money as a gift, or to compensate them for acting as attorney.
It is fair to say that most donors appoint family members to be their attorneys. In the vast majority of cases the attorneys act in the donor's best interests.
There are in excess of 2.6 million registered Lasting and Enduring Powers of Attorney. Whilst the extent of abuse is unknown it would appear that few powers are abused. Any abuse, however is distressing and can have serious consequences. During 2016/17 the Office of the Public Guardian (OPG) received 5,327 safeguarding cases, but only 272 resulted in an application to the Court of Protection.
OPG statistics show that three quarters of all registered LPAs are done with the assistance of professional advisers. We would recommend that you obtain advice from a legal professional and instruct them to prepare and register your LPA to ensure that it is drafted correctly and appropriate safeguards are in place.
A professional can advise you in relation to all aspects of the preparation, registration and use of an LPA.
Putting in place an LPA
- It is quite common for us to be contacted by a son/daughter asking for a power of attorney for their parent, rather than the other way around. A professional would meet with the person making the power of attorney, the parent, to ensure that they understood the nature and effect of the power of attorney. The professional would discuss with them who they could appoint as their attorneys and find out their reasons for appointing the people they choose.
- If a person had no one they could or wanted to ask then partners in a law firm or accountancy practice could be appointed to be their attorneys.
- The LPA must be signed by a certificate provider. The certificate provider's role is to confirm that, in their opinion, the donor is making the LPA of their own free will and that they understand its purpose and the powers they are giving their attorneys. A solicitor is independent and can act as the certificate provider and provide a safeguard against abuse.
- As professionals we would provide advice and specialist drafting in relation to the LPA, particularly important if you have, or need, investments. We would also keep your registered LPA securely for safekeeping and only release it when needed.
Acting under an LPA
- It is common to appoint attorneys "jointly and severally". Even though one attorney may take more of a lead role than the others, they should work in partnership and ensure that all attorneys are aware of decisions being taken on behalf of the donor and that financial information is shared.
- The Mental Capacity Act (MCA) requires your attorneys to help you to make your own decisions, consult with you and take your wishes into account. Attorneys need to comply with the MCA, but how many lay attorneys actually read the 301 pages of the MCA Code of Practice?
- It is important that attorneys understand what they can and cannot do and follow the guidance on the Office of the Public Guardianship website.
- As explained in our previous blog, an attorney has limited powers to make gifts.
- As professionals we can offer advice and guide you through your role in acting as an attorney.
Making an LPA is important as it allows you to appoint people who you want and trust to deal with your finances if you become unable to. It is certainly preferable to not making one. If you have not done so, a family member or friend would have to apply to the Court of Protection at that difficult time to be your deputy, which is a costly and lengthy process.
For further information or advice please contact Alison Craggs or another member of the Succession and Tax team.