I was awoken this morning by John Humphries on the Today programme talking about financial abuse and Lasting Powers of Attorney. At last something to vary the constant diet of Trump and Brexit and which I know a bit more about – in fact it could be my Mastermind specialist subject!
The message from Denzil Lush, recently retired Master of the Court of Protection and a great champion for older and vulnerable people, was that no he was not going to give anyone power of attorney over himself having seen all the times that these can go wrong. He would much prefer the alternative scenario of having someone appointed by the Court as a Deputy in the event that he were to lose his mental capacity. A Deputy has much the same role as an attorney in looking after the affairs of a vulnerable person but is closely supervised by the Court. This can be bureaucratic and expensive, but for some people the right solution.
Having dealt with a few clients where abuse has occurred, and very often by close members of the family, I have some sympathy with this. He is right that the Ministry of Justice have been promoting powers of attorney to everyone without warning of the dangers.
A Property and Finance LPA will give the people you choose a very wide scope for defrauding you if they are so inclined. Although your attorneys are under a duty to act in your best interests, once they have the power registered they can abuse that trust if they are so inclined – raid the bank and even sell your home. And since LPAs were introduced there has been no need to tell other close relatives or friends that this is being done, or to take any advice from solicitors before signing this.
Denzil Lush estimated that as many as one in eight powers of attorney that are activated may be used abusively. From my experience it is a tiny proportion of those who we see that go significantly wrong. Perhaps those who are inclined to abuse do not go near a solicitor and ask the donor to sign a power of attorney without legal advice.
What safeguards are there for an LPA?
- An LPA cannot be used until it has been registered with the Office of the Public Guardian (OPG).
- The application process also requires that a certificate is provided by an independent third party, confirming that the donor is fully aware of the effect of the LPA, and that they are not being inappropriately pressured to prepare the LPA.
- Everyone signing an LPA to agree to act as an Attorney must confirm that they will follow the principles of the Code of Practice.
- You may also wish to incorporate words of guidance or restrictions as to how you wish your attorneys to deal with your affairs.
- You can notify people that you are making a power of attorney. Although it is no longer a requirement to inform anyone when your Lasting Power of Attorney is registered, you can still incorporate this safeguard if you wish. This enables family members to object if they feel you are under pressure to appoint someone who is inappropriate.
However, the main safeguard remains the donor making the right choice of Attorney.
I suggest that you only appoint those you have complete trust in; to bring in more that one friend or all of your children (and not just the most forceful one) as your attorneys; if there is not an obvious person within your circle of friends you can appoint a solicitor. And be careful of the “new” friends and helpers (cleaners, carers, neighbours to name but a few) who may have ulterior motives.
Until you have passed on, no one has a right to consider the money you have worked for all your life as their own.
It may be the case that it is wise to consider making your power of attorney when you are younger and therefore not at a vulnerable stage in your life where you may choose an inappropriate attorney.
With the right advice and guidance, most people can make a power of attorney having safeguarded themselves against abuse. If you are still unsure if this is right for you, come and speak to one of our specialists in a free 30 minute no-commitment consultation.
If you would like to discuss Powers of Attorney and Deputyships contact Rosalind Watchorn Solicitors today to discuss your situation with a member of our Later-Life planning team. Telephone 0114 229 0160 to arrange an appointment with one of our solicitors.