Lasting power of attorney is a vital failsafe if you fall ill, but it does rely on whether those you appoint to handle your finances are competent and trustworthy.
The number of people registering to let loved ones take control if they are incapacitated has soared to more than 800,000 a year, according to the latest figures.
But lawyers say family members often express concern that the ‘wrong’ person has been chosen as attorney, and that they will mishandle the money or take advantage of the vulnerable person involved.
Power of attorney: What can you do if an elderly loved one appointed someone dishonest or inept to handle their affairs?
The guiding principle for people holding power of attorney is that they must always act in the best interests of their donor, and the system is overseen by the Office of the Public Guardian, an arm of the Ministry of Justice.
If trust turns out to be misplaced and matters go awry – and in the worst cases lead to abuse – steps can be taken against holders of powers of attorney, lawyers explain below.
>>>What can you do if a loved one chooses a poor attorney? Find out below
Katie de Swarte, a lawyer specialising in will, trust and LPA disputes at Osbornes Law, explains that financial and property LPAs give attorneys broad powers to buy or sell property, manage financial accounts, handle benefits and tax, and deal with debts.
Lasting power of attorney helps families keep control if illness or accident strikes
LPAs can come into force once an individual lacks capacity or earlier if they want help with day to day running of their affairs, as long as they consent, she says.
But de Swarte cautions: ‘We regularly see family members, who are concerned about a relation who has registered an LPA naming another family member who they consider either untrustworthy or unable to effectively handle their parent’s affairs.
‘The most common cases are where one sibling believes another is acting inappropriately, perhaps because they have noticed spending on unnecessary items or there are poor or questionable decisions being made, such as wanting to sell or transfer the family home when that is unlikely to be in the best interests of the parent.
‘Occasionally we see someone outside the family, a cleaner or perhaps a carer being appointed as attorney and the family becomes concerned their relative is being taken advantage of.’
Michael Culver, chair of Solicitors for the Elderly, says: ‘An LPA is a powerful legal document which enables major decisions about an individual’s finances or care to be made by a nominated person, often a trusted friend or relative.
“Appointing the wrong person can cause untold stress and lasting impacts from decisions made through incompetence or untrustworthiness.
‘Usually people want to nominate their children, but it’s important to be sure their circumstances and personal skills are conducive to carrying out their duties as an attorney.
‘How good someone is at managing their own money, how far away they live from the person they’re acting for and what availability they have around busy jobs or childcare commitments, are all key considerations when deciding who should take on the role.’
Help! My brother persuaded our father to give him power of attorney and now plans to cash in his shares to buy gold
Gareth Horner, a lawyer and managing partner at Parker Bullen, replies here.
Culver says most people opt for a ‘joint and several LPA’ which means two people are nominated as attorney and decisions will require joint agreement in some areas or individually in others.
But he warns against appointing two attorneys who don’t get along, are likely to disagree on big decisions, or live a distance away from each another.
Culver adds: ‘Alarm bells should ring if the initial request for an LPA comes from a family member, friend or an external party, rather than the individual themself, especially if it’s likely to be needed soon.’
How do you protect a loved one if they made a poor choice of attorney?
Kate de Swarte of Osbornes suggests the following steps.
1. Object when an LPA is registered
‘As a safeguarding measure up to five people can be named, usually family members, who will be informed of the application. This is an opportunity to raise objections within 28 days with the OPG and Court of Protection,’ says De Swarte.
‘If the objection has merit, they can stop the registration of the LPA or arrange a hearing to discuss objections.’
Katie de Swarte: ”Once an LPA is registered, it cannot be revoked by anyone but the individual who made it or by the court’
Family members are usually notified unless there is a good reason not to, but in some cases this doesn’t happen especially if LPAs are registered without legal advice, she explains.
However, if a donor chooses not to inform anyone they are setting up an LPA, they will need to get two certificate providers to confirm they understand the purpose of the LPA and that they are not being pressured.
Certificate providers can be a friend or a colleague who has known them for at least two years or a professional such as a GP or solicitor, adds De Swarte.
2. Report your concerns to the OPG
‘Once an LPA is registered, it cannot be revoked by anyone but the individual who made it or by the court. At this stage relatives concerned about an attorney will need to raise this with the OPG,’ says De Swarte.
The OPG will investigate and may conclude there is no evidence to suggest inappropriate conduct, but if there is it can provide written instructions for attorneys to follow, she explains.
If this fails, action can be stepped up to include freezing bank accounts and requesting an attorney account for their actions, and ultimately the OPG can apply to the Court of Protection to revoke the LPA or put in place some other order.
3. Go the Court of Protection yourself if necessary
De Swarte recommends attempting to resolve the situation without involving the courts where possible.
She says, ‘Disputes involving family members can be very emotional especially where family members vent longstanding grievances and relatives are falling out with each other.
Help! My aunt with dementia has a solicitor attorney charging £760 an hour
He has racked up a bill of £40k to date and now he wants to sell her flat at an £83k loss…
Read a response by Fiona Heald, partner at law firm Moore Blatch, including how the OPG handles complaints of this kind.
‘The situation can escalate but it’s important to recognise that disputes can be costly.’
De Swarte says if you take a case to the Court of Protection, it will want to see evidence to support any claims made.
But it can decide to appoint a ‘deputy’ to take over from an attorney. Read more here about deputyship.
‘Deputies are subject to a higher level of supervision than attorneys under an LPA and will be required to complete an annual report to the OPG to check that decisions are being made in the best interests of the individual,’ says De Swarte.
She notes that if the court is forced to appoint a deputy they may well choose an independent one, such as a solicitor.
Usually their fees for acting as a deputy will come out of the funds of the person who originally set up the LPA, but there are situations where other family members will pay or contribute.