My sister and I have had lasting power of attorney (LPA) for our father for a number of years.
He was diagnosed with dementia in March and has signed another LPA that he doesn’t remember doing.
He’s very upset about this and doesn’t want this LPA in place as our brother, who has got him to sign it, wants access to my father’s shares to cash in and buy gold.
The problem is that our brother lives with him and if my father cancels the LPA, he will simply get him to sign another LPA.
Financial concern: Our brother persuaded our father to give him power of attorney, and now plans to cash in his shares to buy gold (Stock image)
My father does know what he does and doesn’t want but is extremely vulnerable and can be easily pressured into signing a document. This is a very stressful situation for the family as our brother can be very volatile.
I’ve reported it to the Office of the Public Guardian’s safeguarding unit and they are investigating it. We don’t know what to do for the best.
Tanya Jefferies, of This is Money, replies: You are understandably worried about your father’s welfare and about his affairs being mishandled given his poor health and vulnerability.
Lasting power of attorney helps people secure their finances in case they become too ill to handle them by appointing someone they trust as attorney, usually a family member or friend.
But this can go awry, and in the worst cases lead to abuse, if that trust turns out to be misplaced.
The guiding principle for people holding power of attorney is that they must always act in the best interests of their donor.
Since you seem to suspect that your brother pressured your father into giving him power of attorney, and at the very least plans to make poor decisions with his money, you have done the right thing in reporting this to the relevant authority, the Office of the Public Guardian.
Lasting power of attorney helps families keep control if illness or accident strikes
This body is responsible for protecting people in your father’s situation, and you can find out more about its safeguarding work here.
The OPG will look into your brother’s actions independently, and you will have to let its investigation run its course
Regarding your father’s investments, it is impossible to be certain based on the information you give, but although you may disagree with him your brother could be genuinely convinced he has your father’s best interests at heart.
Financial experts will usually recommend a balanced investment portfolio, which is well diversified among assets like shares, corporate and government bonds, commercial property and so on.
They may suggest holding some amount of gold, generally as insurance against crisis – which we are in at the moment – and as a hedge against inflation.
Your brother wanting to rebalance your father’s portfolio to sell some shares, and buy some or more gold, might be a understandable stance. Intending to dump all the shares and put the entire proceeds into gold looks much less reasonable.
If you haven’t already done so, perhaps it is worth considering whether to get a financial adviser to give an independent recommendation on the best investing strategy for your father.
You can ask for one-off help if you don’t want to tie him into an expensive, ongoing relationship with an adviser, and we explain how to do this here.
We also asked a lawyer to give his take on your case, where both you and your sister, and separately your brother now too, might all hold power of attorney for your father and be in conflict over his interests.
He endorses your action in contacting the OPG, and offers further suggestions and information that might help below.
Gareth Horner, managing partner in the wills, probate and estate planning department at Parker Bullen, replies: The good news is that you and your sister have already taken appropriate action and the Office of the Public Guardian’s safeguarding unit is investigating this issue.
Contacting the OPG, a Government body within the Ministry of Justice, is what all attorneys must do if they have a concern about how a person’s affairs are being managed under a Lasting Power of Attorney.
The safeguarding unit will consider your father’s mental capacity, his ability to establish a second LPA for your brother, and whether there may have been coercion involved.
The OPG has stated that there may be delays in its service due to Covid-19, but I have not experienced any.
What other action might you take to protect your father’s interests?
Gareth Horner: It is very rare that anyone should need two or more LPAs covering either their finances or health
In this case, it appears that there could be two separate LPAs covering your father’s property and financial affairs, and it highlights the problems that this causes.
It’s a common problem as often people mistakenly assume that an LPA is like a will and when you draft a new one it replaces the old one, but this is not the case.
To replace an existing LPA the donor, your father, must have had the mental capacity to decide he wanted a new one, and have sent the original one to the OPG with a written statement called a ‘deed of revocation’.
Unless the above happened, the first LPA naming you and your sister still stands and you can continue to act for your father.
It is very rare that anyone should need two or more LPAs covering either their finances or health, and I would advise against it.
Multiple LPAs for the same purpose are not a good idea. On a day-to-day level they can confuse the likes of banks, who often already struggle with acting on the instructions of a single LPA.
They can also cause more serious problems when the people managing someone’s affairs, the attorneys – here, your brother, and you and your sister – disagree and are acting under separate arrangements.
In this case, you and your sister have shown you are clearly capable of navigating the requirements of the OPG, and so I would not normally suggest you seek legal advice.
However, there may be an urgent need to prevent your brother making a potentially damaging financial decision while the OPG looks into this case.
I therefore do recommend that you and your sister, who are attorneys of a valid LPA, write to your brother asking him not to take any action until the OPG has concluded its investigation.
And while you and your sister may be perfectly capable of addressing this issue on your own, I would on this occasion suggest that the letter could have greater impact if it came from a solicitor.
The letter should include details of the action you will take should you need to, including the possibility of legal action.
A letter such as this would be inexpensive to draft – a lawyer would probably charge you around £200 – and it could prevent any ill-informed financial decisions being taken before the OPG concludes its findings.
What if your brother has already made transactions with your father’s money?
This case is clearly upsetting for those involved, but it is only possible to comment on the facts you have provided.
Your brother could be making what he thinks are prudent long-term investment decisions given the current economic crisis.
But in the very unfortunate case that your brother has already acted and there is a financial loss then it would be incumbent on you and your sister, as attorneys under the original LPA, to take legal advice as soon as possible.
This could lead to a claim for undue influence or a breach of trust and/or fiduciary duty claim.
You would require authority from the Court of Protection to litigate on your father’s behalf and investigate suspected financial abuse and, if appropriate – and in the best interests of the vulnerable person involved – to take action.
What else should people setting up or holding power of attorney bear in mind?
STEVE WEBB ANSWERS YOUR PENSION QUESTIONS
The situation you describe regarding your father is plainly distressing, but unfortunately it is becoming increasingly common.
LPAs are incredibly important tools for managing the property and financial and/or health and welfare needs of people who can’t do so themselves.
However, they can also result in inadvertent or even deliberate mismanagement if appropriate attorneys are not chosen to look after people’s interests.
Your family’s situation highlights very well the importance of choosing the right people to support you when you are no longer capable.
Many of these considerations also apply when you are setting up a will.
Generally speaking, while it is good to include your spouse or siblings, consider the fact that they may not be around or have the inclination to sort out your wishes when the time comes.
If possible, include two attorneys as standard and a third as a back-up should one of the attorneys not be able to act.
Also, try to include someone who is not a relative and who can stand back from the understandable emotions that often surround decision-making, and who can appreciate that family dynamics may change over time.
Finally, in light of the Covid-19 outbreak, the OPG are asking that those who care for the most vulnerable people in society keep informed about government recommendations concerning the likes of social distancing.
Attorneys should check its guidance pages regularly and ensure the people they look after are well supported.