Cathy Izzard, Partner at Tees, advises on the steps a solicitor can take which may help you avoid future issues with your Lasting Power of Attorney.
Denzil Lush, a retired senior judge of the Court of Protection, raised a few eyebrows recently when he said on the BBC’s Today programme that, in his opinion, the creation of a lasting power of attorney (LPA) puts people at risk of being exploited by their family, friends or neighbours. His concerns had been prompted by cases where the powers under an LPA had been abused, resulting in elderly people losing their money and even their homes.
The use of LPAs has become increasingly widespread – there are now over 2.5 million registered with the Court of Protection. In 2016, 600,000 new applications were made, compared with 440,000 in 2015. It is reassuring to note that cases of abuse are comparatively rare, amounting to less than one per cent of registered LPAs.
How an LPA works
An LPA is designed to protect you if you lose the ability to make decisions for yourself. Making an LPA allows you to choose one or more people you know and trust to act as your attorney. With an LPA in place, your attorney can make important decisions about your assets – such as your money, investments and home.
Many people create an LPA when they are still comparatively young. This is sensible because an LPA often comes into effect when you can’t make decisions for yourself. This is known as having lost “mental capacity”. Without mental capacity, you cannot make an LPA – as you would not be in a position to understand the implications of doing so.
It’s very common for people to put off creating an LPA because they believe their loved ones could simply step in and look after their finances and other affairs. However, it’s not as straightforward as that – for your protection. Without an LPA in place, a family member would have to apply to the Court of Protection to be appointed as your Deputy. Only after the Court grants them Deputyship would they have the legal right to deal with your affairs. This process can take several months and fees and annual charges apply. So, creating an LPA can help to make it easier on your family – emotionally and financially – if you ever need to rely on them.
What to do if you’re worried about making an LPA
LPAs are very powerful documents. When you make an LPA, you allow a trusted third party to act on your behalf. This might be a family member or a close friend whom you trust to act in your best interests. A solicitor can advise you on the implications of making an LPA – it’s a big step to take, and an expert can help you get it right.
Cathy Izzard, Partner at Tees, advises on the steps a solicitor can take which may help you avoid future issues with your LPA.
“We strongly recommend that you do not sign any documents prepared by relatives or friends, particularly those which you don’t fully understand. Show these to your solicitor before you take any further action.
It goes without saying that you shouldn’t sign anything without carefully reviewing it first, and this applies to documents from family and friends too,” Cathy added.
At Tees, we advise on writing safeguards into LPAs – such as requiring your attorney to keep financial records of all transactions undertaken on your behalf.
Nominating the right person to act as your attorney is crucial. We will guide you on how to make your choice – it can be daunting! Above all, it should be someone you trust and feel confident will be able to act wisely on your behalf. You might want to consider the following points when deciding who to choose:
- Do you know the attorney well?
- Is the attorney competent and reliable?
- Are they completely trustworthy?
- Do you feel entirely comfortable that they will make the right choices on your behalf?
- Is the attorney happy to take on this role?
We always encourage our clients to discuss the implications of making an LPA with their family to avoid misunderstandings later. “A lot can change in the time between registering your LPA and the first time you’ll need to use it. We suggest our clients protect themselves by reviewing the terms of their LPAs from time to time – to ensure everything remains current and according to their wishes
Reviewing your LPA, with your solicitor, say every 5 years or more frequently if there have been significant changes for you or your attorney will help make sure it works the way you expect if you ever need to rely on it,” Cathy continued. Your personal circumstances and relationships can change a lot in just a few years; reviewing your LPA consistently can help manage these changes appropriately.
You can choose to appoint up to four attorneys and stipulate that they make all decisions together. Alternatively, you can allow them to act independently and if you wish make them responsible for different aspects of your finances. There are other safeguards you can consider putting in place, such as stipulating that your attorney must have their accounts reviewed on an annual basis.
Tees can also store the original registered LPA document, helping to ensure that it isn’t used until necessary. If we hold an LPA on your behalf, you can instruct us to seek evidence of lack of capacity if this is alleged by your attorneys, before we release certified copies of the document.
LPAs can, if necessary, be cancelled if the donor has sufficient mental capacity by signing a Deed of Revocation. If you or your family have concerns about the actions of your attorneys, you can contact the Compliance Unit of the Office of the Public Guardian (OPG) who can investigate, and can refer matters to the police if necessary. If the OPG wants to bring an action against the attorney it can apply to the Court of Protection, which has the power to revoke the LPA if the donor doesn’t have the capacity to do so. Therefore, in the appropriate circumstances, it may be possible to cancel or change an LPA arrangement if you need to.
If you have any questions you would like answered on any aspect of making or using an LPA, then please call our specialist team on 0800 013 1165 for an initial chat at no obligation, or fill out our enquiry form and we’ll be in touch.