As a private client solicitor, I often find myself discussing the importance of making Lasting Powers of Attorney (LPA), with my clients, my family and quite frankly anybody who will listen to my advice!
In an ideal world, the person making the Lasting Power of Attorney (LPA), (the Donor) will appoint trustworthy Attorneys who carry out their duties in the correct and proper manner. Sadly in my 10 years of experience I have dealt with a number of financial abuse cases ranging from the son or daughter who thought it was ok to ‘help themselves’ here and there to the carer who befriends a Donor with the intention to abuse their position as an Attorney.
I have set out some helpful DO’s and DON’Ts for the Donor and Attorneys below, to help minimise the risk of abuse.
As a Donor:
- Do take professional advice. DIY Lasting Power of Attorney (LPA) applications may save fees but in the long run this could cost you thousands if you choose the wrong Attorneys or fail to include provisions setting out how your Attorneys may act.
- Do hold you Attorneys to account. For example you can stipulate in your Lasting Power of Attorney (LPA), that your Attorneys should submit annual accounts to a third party professional for auditing.
- Do put preferences in stating whether you wish for your Attorneys to make gifts to anybody (including gifts to the Attorney). A recent test case bought by the Office of the Public Guardian (OPG) decided that so long as the Donor has authorised an Attorney in the Lasting Power of Attorney (LPA) to make the gift then he/she can do so as long as the instruction is not mandatory.
- Do consider appointing professional executors of your Will. What an Attorney may think they have got away with during the Donor’s lifetime will be picked up by a vigilant lawyer following the Donor’s death.
- Don’t appoint a sole Attorney unless this is unavoidable – if you have more Attorneys involved they are more likely to hold each other to account.
- Don’t leave the preferences and instructions section blank. Take advice from a professional and include any preferences or instructions that are right for you; Lasting Powers of Attorneys (LPA), should be bespoke not generic!
- Don’t appoint an Attorney who is bad with money – just because they are your son or daughter doesn’t mean they are the right Attorney for you.
- Don’t give third party access to your bank account without a Lasting Powers of Attorney (LPA), in place – there is no accountability with third party access.
As an Attorney:
- Do keep a record of the decisions you make as Attorney and keep receipts of all expenditure. If you maintain proper financial accounts it is very easy to explain your actions down the line.
- Do open a separate ‘Attorney’ bank account to deal with the Donor’s finances – an Attorney must not mix their own money with the Donor’s. The Office of the Public Guardian (OPG) says joint account are ok where a joint account was operated prior to the Donor losing capacity, however I prefer to see separate accounts so there is no risk of confusion.
- Do consult the Attorney on all decisions to establish whether they lack capacity to make that particular decision. Only once you have established they do not have capacity can you then make that decision for them.
- Do check how the Donor has asked you to make decisions – perhaps they have allowed you to make some decisions on your own and some jointly with another attorney.
- Do check to see if the Donor has put any instructions or preferences in place on how you can act and stick to them!
- Don’t delegate your power to anybody else. There are some circumstances where you can delegate your power e.g. to a discretionary fund manager managing an investment portfolio, but the Lasting Power of Attorney (LPA), must include this preference.
- Don’t pay yourself a wage or help yourself to the Donor’s money! Only professional Attorneys can charge for acting as an Attorney and only when the Lasting Power of Attorney (LPA), allows this. Lay Attorneys can claim out of pocket expenses only.
- Don’t let your Donor down….act with honesty, integrity and make wise decisions.
The Office of Public Guardian can and will investigate cases of suspected abuse and if anybody suspects an Attorney is abusing their power they should contact the Office of Public Guardian (OPG) safeguarding unit.
To find our more about how to start the process for appointing someone you trust (your Attorney) to make decisions on your behalf during your lifetime, if you become mentally incapable of dealing with your own affairs, see our dedicated ‘What you need to know about Lasting Powers of Attorney’ fact sheet.
To speak to a member of the Steeles Law specialist Wills, Trusts and Probate team, please call 01603 59800 or complete the ‘Get in touch’ online enquiry form and a member of the team will contact you. Appointments available in Norwich, Diss and London.
*The information provided in this article is designed to provide useful information on the subject, not to provide specific legal advice.