A Lasting Power of Attorney for Property and Financial Affairs (LPA PFA) is a legally binding document which you (the Donor) can use to give authority to someone (your Attorney) to make decisions on your behalf about your property and financial affairs at some point in the future . Donors usually choose their trusted friends or family to be their Attorney(s). Once an LPA PFA is in place the Donor can choose when they wish to start using it. The Donor does not have to have lost capacity for it to be used. There have, however, been a number of reports in the media recently where Attorneys have abused the power given to them by the Donor, and, at Thompson Smith and Puxon (TSP) Solicitors, we have also seen a rise in the number of cases where an abuse of power has occurred. In this situation the Donor is sometimes too embarrassed to take any action or, as is often the case, they are not even aware of what has been happening.
Sharon Auton, Director and Dispute Resolution team leader at TSP, details some examples of the types of abuse she has come across and what to look out for if you think a friend or family member is abusing their power?
Attorneys are able to make gifts to people on behalf of the Donor, but these should only be on customary occasions and should not be excessively large. If the Donor has lost capacity, the gifts should not be disproportionate to the pattern of giving the Donor had when they had capacity. In a recent case on which the team acted, a Donor’s son, acting as her Attorney, sold her property and retained the proceeds, initially refusing to return the money, claiming it was his inheritance. Following our instruction the son returned the money to his mother.
Loan applications or credit cards taken out in the Donor’s name
A loan or credit card taken out in the Donor’s name should raise concerns about potential misuse of the Attorney’s powers, particularly if the Donor does not benefit from the loans or credit cards. Financial abusers can be charged with various criminal offences including theft and fraud, and the punishment can include a jail term.
In Colchester, last year, a woman was jailed after spending her parents’ savings, at least £130,000, and running up debts in their names, after they left her in charge of their finances whilst they were touring abroad. The parents were left stranded and had to borrow money to return home and were then repeatedly chased for “their” credit card debts. Their life savings were gone and their relationship with their daughter left in tatters.
Other things to look out for
- High risk investments or investment in a business the Attorney owns or has an interest in. Any investments made by the Attorney on behalf of the Donor must be in the Donor’s best interests and in particular, must not benefit the Attorney. An investment in the Attorney’s own business would be a serious cause for concern
- Failure to pay the Donor’s expenses or a general lack of money made available to the Donor. This would raise concerns that the Attorney is not properly administering the Donor’s financial affairs. It is important for Attorneys to actively manage the Donor’s affairs as this is the purpose of the Lasting Power of Attorney
- Attorneys should keep the Donor’s and their own money separate. Failure to do this raises concerns about whether the Attorney is acting properly
The Mental Capacity Act 2005
Section 44 of the Mental Capacity Act 2005 created an offence of ill treatment or neglect of a person who lacks metal capacity which applies specifically to Carers, Attorneys and Deputies. TSP acted on one such case recently where a Carer persuaded an elderly gentleman to gift her goods and money, including Mulberry handbags, designer clothes and a car, totaling over £200,000. An LPA PFA had been written but was not registered. TSP assisted the son, as his father’s Attorney, in recovering all of the goods and most of the money.
The Office of the Public Guardian
To be effective all LPAs must be registered with the Office of the Public Guardian (OPG), a Government agency which protects people in England and Wales who may not have the mental capacity to make certain decisions for themselves. By visiting their website you can find out if someone has an Attorney acting for them or you can report a concern if you have one.
In 2016-2017 the Office of the Public Guardian investigated 1,266 cases relating to abuse of Powers of Attorney, 45% more than in the previous year. There was also a 19% increase in the number of registrations for Powers of Attorney during the same period. There are currently around 2.5 million Attorney agreements registered in England and Wales.
If you suspect that the Attorney under a Lasting Power of Attorney is abusing their position you should contact the Office of the Public Guardian immediately. This may lead to an application to the Court of Protection to revoke the Lasting Power of Attorney. If you suspect that a criminal offence has been committed (such as fraud or theft) you should also contact the Police.
If the Donor has sufficient capacity they can cancel the Lasting Power of Attorney by signing a Deed of Revocation and notifying the Attorney. It may also be possible to recover money in civil proceedings. The Dispute Resolution team at TSP can assist with this. If you have concerns that a Lasting Power of Attorney is being abused please contact Sharon for more information and advice on 01206 574431 or by email at email@example.com
Acting as a Professional Attorney
Fiona Ashworth, who leads the TSP Wills and Estates team, acts as a professional Attorney for a number of clients. These clients sometimes do not have any family who are able to undertake this role on their behalf, or they have complicated family circumstances and do not have anyone that they trust sufficiently to undertake this role for them. Fiona gives advice and assistance to the client, on a day-to-day basis, on many aspects of their lives, depending on their individual circumstances, and undertakes total responsibility for their property and finances, often running into millions of pounds. She works closely with many independent financial advisors to ensure that client funds are invested and managed appropriately and liaises with the client’s accountant where there is one. Where appropriate Fiona also writes Wills for these clients and in many cases will also act as professional Executor in the future. For more information in this area Fiona can be contacted by email at firstname.lastname@example.org