Helena Fairley
- Associate
- Private Client
Awareness is growing of the scale of abuse of lasting powers of attorney (“LPAs“). At the end of last year, a Private Members’ Bill was tabled, one of the aims of which is to reduce the risk of financial abuse of the elderly and vulnerable under an LPA. Despite the risk of abuse, however, an LPA is an important part of your estate planning – so, what steps can be taken to protect those who make LPAs and/or attorneys acting under them?
What is a Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal document that sets out who is able to make important decisions on your behalf. The person making the LPA is referred to as the donor, and the person(s) they appoint are referred to as the attorney(s).
Attorneys can be responsible for making decisions relating to the donor’s health and welfare and/or their financial affairs, and there are separate LPAs for both types of decisions. An LPA for health and welfare only comes into force once the donor has lost mental capacity. An LPA for financial decisions can be used whilst the donor retains capacity, unless the donor has expressed otherwise in the LPA. Before an LPA is used, it must be registered with the Office of the Public Guardian (“OPG“).
There are no set rules about who a donor can appoint as their attorney(s), however it is important to choose a trusted individual. If appointing more than one attorney, it is equally important to choose people who are likely to be able to work well together and act in the donor’s best interests.
If an individual loses mental capacity and does not have an LPA in place, an application would need to be made to the Court of Protection to appoint a person as a deputy for that individual. Unlike an LPA, the individual concerned would have no control over the identity of the deputy and the process is generally more costly in terms of time and money than making an LPA.
Can an LPA be challenged?
Anyone can object to the registration of an LPA. For example, objections may arise if it is believed that:
- the donor did not have sufficient mental capacity to understand the implications of the LPA;
- the donor did not sign the LPA by their own free will; or
- the attorney(s) appointed cannot or will not act in the best interests of the donor.
Conduct of attorney(s)
If an LPA has been registered and is in use, it is still possible to raise concerns about the actions of the attorney(s). For example, there may be concerns of financial abuse, inappropriate gifts or unsuitable decisions in relation to care. Such concerns can be raised by making a report to the OPG as the OPG is responsible for supervising the conduct of attorneys and has the power to initiate an investigation if they consider it necessary to do so; this may include reviewing bank statements, care records or any other relevant information.
If the OPG has reason to believe that an attorney has acted improperly, they may refer the matter to the Court of Protection who can decide whether an attorney should be removed or have their powers limited. Court proceedings of this nature can have significant cost consequences and it is therefore imperative to seek specialist advice.
Conflicts between attorneys
Conflicts can arise between attorneys who have both been appointed by the same donor. They may be unable to agree on what is in the best interests of the donor, or there may be poor communication preventing them from making joint decisions. It is important that proactive steps are taken to resolve such disputes to ensure that the proper care of the donor is not disrupted.
Before an LPA is in use
A donor may change their mind about the ability of their attorneys to act on their behalf in future. Specialist advice is required in these circumstances on whether the donor is able to revoke the existing LPA and make a new one, keep the LPA in place and remove the attorney, or whether the involvement of the OPG is required. This situation is easier to deal with before capacity is lost.
How we can help
The OPG and the Court of Protection have set procedures and time limits. It is therefore important to act promptly if any concerns arise and seek legal advice at the outset. Our Private Client Disputes team can assist with disputes concerning LPAs or deputyships, and provide advice on an attorney’s or deputy’s duties. We can advise on and prepare a wide range of applications to the Court of Protection in respect of incapacitated individuals, including:
- the appointment of a deputy for property and affairs;
- dealing with the OPG in cases of suspected financial abuse by an attorney; and
- advising on claims against attorneys and deputies.
If you would like to discuss the above, please do not hesitate to contact a member of the Private Client team.
This article is for general information only and does not seek to give legal advice or to be an exhaustive statement of the law. Specific advice should always be sought for individual cases.
Meet the team:
Victoria Mahon
- Partner
- Private Client