Following a recent freedom of information request, it has been revealed that investigations into the actions of attorneys and deputies have increased by more than 40% in the past year - from 1,199 in 2016/17 to 1,729 in 2017/18.
The figures reflect the fact that, sadly and inevitably, there will always be attorneys who abuse their powers and dishonestly use the Donor’s money or assets for their own benefit. However, the figures will also include a number of attorneys who have, unwittingly and unintentionally, made mistakes as a result of not fully understanding the role of an attorney and the parameters of what they can and cannot do.
There are two types of Lasting Power of Attorney (LPA) – one covering property and financial affairs and the other health and welfare matters. Both are potentially of huge benefit and should be considered as part of prudent forward planning. Under a Property and Financial Affairs LPA, a person (known as the Donor) appoints attorneys to deal with his or her property and financial affairs. The LPA may be intended for immediate use or it may be signed as a precautionary measure, so it is in place if it is ever needed. The attorneys can act while the Donor still has capacity – with the Donor’s consent and provided the LPA authorises it – and they will need to act if the Donor loses capacity.
The increase in investigations into the actions of attorneys highlights the need for care in the preparation of the LPA and a clear understanding by both the Donor and the attorney of the responsibilities that come with the role of attorney. The following points are just some which should be borne in mind at the outset, when a Property and Financial Affairs LPA is being considered. Many of them apply also to attorneys under a Health and Welfare LPA.
- The Donor’s choice of attorneys is crucial. The Donor should trust the proposed attorneys to manage his or her financial affairs with competence, honesty and integrity – but should actually go beyond this and think about the particular characteristics of each proposed attorney. How well do they appear to organise their own affairs? Do they have time to look after the Donor’s affairs as well as their own? Will they work well with any other proposed attorneys? A well considered choice will go a long way to ensuring the smooth running of the LPA in the future.
- Before agreeing to act, attorneys should consider critically whether they feel able to commit to the task of managing the Donor’s affairs for an indefinite period should the need arise, usually without financial recompense. If they are willing to take on the role, they should talk to the Donor at the outset about his or her finances and how they are arranged, so they have an idea of the extent and complexity of the Donor’s estate.
- The role of attorney brings a number of duties and responsibilities. Attorneys must keep the Donor’s finances confidential and entirely separate from their own. They must not use the Donor’s money or property for their own benefit even if they think the Donor would agree (although the Donor can choose to benefit an attorney while he or she still has capacity).
- Attorneys must always act in the best interests of the Donor and must not benefit from their position as attorney. While they can recover out of pocket expenses, they cannot charge for their time in acting as attorney (unless the LPA authorises them to do so).
- Attorneys are under a duty to keep accounts of their dealings in relation to the Donor’s affairs. The Office of The Public Guardian can ask them to produce these at any time.
- An attorney’s ability to make gifts on behalf of the Donor is particularly limited. Attorneys should familiarise themselves with the strict limitations on gifts and bear these in mind if they are considering making a gift on the Donor’s behalf.
- The Donor should consider the possibility of an attorney acting outside their powers and think about whether to include any extra safeguards in the LPA itself. The LPA could, for example, include a requirement for financial statements to be produced to a third party at regular intervals or for an attorney to consult with a named person in relation to gifts over a certain amount.
- Attorneys must follow the key principles of the Mental Capacity Act 2005 and also have regard to the Mental Capacity Act Code of Practice.
By putting in place an LPA, the Donor is conferring wide powers on the attorney and placing great trust in them. The attorney is giving up their time, usually without payment, and assuming a role which carries considerable responsibility. The key is that they both understand the extent of the powers, responsibilities and limitations of the role of attorney. Seeking professional advice at the outset will ensure that both the Donor and the attorneys make fully informed decisions and understand the implications of those decisions. This will assist in the smooth running of the LPA into the future.
For advice on Lasting Powers of Attorney, please view our information sheet
or contact one of our Solicitors below.
- Northampton - 01604 233233 or click here
to email Jane.
- Northampton - 01604 463131 or click here
to email Hauke.
- Cambridge - 01223 447422 or click here
to email Alexandra.