Abuse of Power of Attorney- careful decisions need to be made

Lasting Powers of Attorney (LPAs) have been with us since 2005, when they replaced Enduring Powers of Attorney. LPAs brought in additional safeguards for a Donor appointing Attorneys in an attempt to avoid abuse of Power of Attorney; firstly a new section to confirm the Donor’s capacity, secondly a section for the Donor to complete to advise individuals that they had an LPA and, finally that it had been registered at Court.

Matters have not always been straight forward and there have been issues with the new LPAs; huge delays in registering the documents at the Office of the Public Guardian, concerns about the increased costs of the documents and the complex forms (which have since been revised) have all had to be overcome. However, it is clear that LPAs can be invaluable in planning for the future.

For example, if an accident were to happen which left an individual incapable of handling their own affairs, an LPA is the way that an individual can ensure that bills are paid and financial matters settled. If an LPA was not in place, an application to appoint a Deputy, chosen by the Court, would have to be made. By making an LPA, the Donor therefore chooses who they would want to deal with their affairs.

Although setting up LPAs can be expensive, it is cheaper and much quicker than the Deputyship application and does not require ongoing annual fees.

In an interview on the BBC recently, Denzil Lush, a former Court of Protection Judge, said that Donors need to consider carefully whom they wish to appoint as their Attorney to avoid abuse of a Power of Attorney. If the Donor is currently suffering with dementia (or other illnesses that affect their capacity) then a professional should be consulted to assist in creating these documents and to ensure the most appropriate person is appointed to limit any potential fraud.

Former Judge Lush referred to the story of Frank Willett, a Dunkirk and Normandy veteran who appointed his neighbour as his Attorney under the old style Enduring Power of Attorney. He was defrauded out of his life savings and by the time his daughter realised that there had been abuse of the Power of Attorney, Mr Willett’s war medals and family photographs had been disposed of by his Attorney. It was devastating. Although this related to an Enduring Power of Attorney that does not have the safeguards of an LPA, Judge Lush is right to point out that the choice of Attorney is essential. This choice should also be reviewed from time to time, just as the appointment of Executors under a Will are reviewed.

If you have an Enduring Power of Attorney then, due to limited checks and safeguards, you should consider, where possible, updating it to the more robust Lasting Power of Attorney to limit the possible risks.

Shorts can assist with the preparation and registration of Lasting Powers of Attorney relating to both Financial or Health and Welfare decisions. If you would like to go ahead with a document or discuss matters further, please contact the Private Client Team.