Legal Briefing – Powers of Attorney

After Denzil Lush, recently retired Senior Judge in the Court of Protection, said that he would never sign a Lasting Power of Attorney because it was open to abuse, we look at how people can make the right decision for their future, to protect themselves and their money.

What is a Lasting Power of Attorney?

A Lasting Power of Attorney (LPA) is a document which you sign that authorises other people that you choose to make decisions about your money and your home; or your health and welfare.

Why do I need one? Or two?

Age or unforeseen accident can mean you find it difficult to manage your money or make decisions yourself.  The LPA allows YOU to choose who helps you as and when you need help.

What are the risks if I don’t have one?

If you do not have an LPA, your money and property cannot be used to support you.  The Court must be asked to appoint a Deputy.  It can take more than 6 months for a Deputy to be appointed, longer if there is dispute in your family about who should be the Deputy.  Until the Deputy is appointed, your assets are frozen, and cannot be used to support you.

The Court application is slow, and more expensive than signing an LPA.  There are further costs on an annual basis as the Court will supervise the actions your Deputy takes, and will require an insurance bond is in place to protect you.  All of these costs are paid from your assets.  The person who is appointed Deputy may not be the person you would want to assist you.

If the decisions are about issues such as where you live, who looks after you and what health care treatment you need, it is rare for the Court to appoint a Deputy to make the decisions.  Social Services will consult with those involved in your care and with your family to try to get an agreement but if no agreement can be made, Social Services have the power to make a Best Interests decision.  The doctor who is treating you will make all health decisions.

What are the risks if I do have one?

The legislation that created LPAs did not put in place any automatic regulation or review of the way an attorney manages the donor’s assets.  There is no requirement for the attorney to hold insurance to protect the donor.  If the attorney is suspected of fraud using the LPA, the Office of the Public Guardian (OPG) can investigate, and ask the Court of Protection to remove the attorney.

It is thought that a lot of fraud goes undetected and unreported to the OPG, which is an irony since the reason the government gave for replacing Enduring Powers of Attorney with LPAs in 2007 was, in part, to protect against fraud.

What can I do to make sure my money is safe when I have a Lasting Power of Attorney?

Take advice over who you should appoint as an attorney – do they have the necessary skills and are they trustworthy?

Write protections into the LPA.  You can require the bank accounts and assets are audited once a year.

Appoint professional attorneys who already have insurance to protect you – such as solicitors.

What can my family or friends do if someone steals my money using the Lasting Power of Attorney?

If they report their suspicions to your local authority adult safeguarding team, that team should ensure the police investigate.  If not, report the concerns direct to the police. You should also report your concerns to the OPG.  Abuse of any kind of a vulnerable person is a criminal offence.

They should also speak to you and discuss their concerns, as you are able to revoke an LPA if you understand the consequences of doing so.

If you are able to manage your accounts yourself, you can notify the bank you want to end your attorney’s access to your accounts, but you will need to follow this up with a formal cancellation of the LPA.

Will anyone check on how my money is being spent?

The situation is different depending on whether you still have capacity to make decisions and are being helped by the attorney, or whether you have lost capacity.

If you have capacity and are being assisted by the attorney, you are still entitled to receive bank statements, have your own bank card and speak to the bank yourself so you can check what is going on.

If you have lost capacity,  unless you include a formal requirement to have your accounts audited annually in the LPA, no one will automatically check on how your money is being spent.

Additional

It is unrealistic to suggest that most people should rely on Deputyships.  The Family Court statistics for the first quarter of 2017 (the most recent available) show the Court of Protection dealt with 4,066 applications for the appointment of a Deputy for Property and Financial Affairs.  In the same period, 186,169 LPAs were registered with the OPG. If 50% of these were for Property and Affairs, and only 20% of those were to be used immediately it would mean the Court would suddenly face an additional 18,616 Deputyship applications to deal with in one 3 month period.  It would start to take far longer than 6 months for the Deputyship appointments to be made.

Realistically, a better solution is to take advice on including safeguards in the LPAs, and to avoid situations to arise where people are able to sign LPAs without taking proper advice on the skills an attorney requires.

For advice and help when deciding how to protect yourself and your assets, please contact Phillipa Bruce-Kerr on

01242 246 430 or at PBKerr@hcrlaw.com

Author
Phillipa Bruce-Kerr
Partner
Direct Dial: +44 (0)1242 246430
Mobile: +44 (0)7725 242 162
Email: pbkerr@hcrlaw.com