Lasting Power of Attorney: are people vulnerable to financial abuse?

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Wills and probate solicitor, Alyson Coulson, looks at whether a Lasting Power of Attorney (LPA) is a blessing or a threat.

Denzil Lush, the now retired senior judge at the Court of Protection, has published a book on Lasting and Enduring Powers of Attorney. The publication has hit the headlines due to the grave concerns the ex-judge has expressed about Lasting Powers of Attorney and the significant potential for financial abuse of vulnerable people.

I had the privilege on several occasions of hearing Mr Lush speak at events before he retired and indeed once appeared before him in court many moons ago as an articled clerk, at a hearing at the Court of Protection. I found him on all of those occasions to be very clear and measured in his thinking, so I have no reason to believe that he is being alarmist in his new book.

According to press reports, Mr Lush suggests that the Ministry of Justice is being “disingenuous” in actively (some would say aggressively) promoting the Lasting Power of Attorney as the best way to deal with the administration of the financial affairs of a person lacking mental capacity and that such documents can be prepared online without the need for any legal advice. Mr Lush states that allowing the process of Deputyship, with the additional level of supervision by the Office of the Public Guardian (OPG) that it brings, would be safer and more appropriate in some cases.

It cannot be denied that there have been some very unfortunate cases where financial abuse has occurred and vulnerable people have lost significant sums of money. We encourage all clients to make lasting powers of attorney (for finance and for health matters), regardless of their age or state of health. None of us know when mental incapacity may happen to us. It may be as a result of an accident or sudden illness and not only as a result of the illnesses more common in old age.  And in advising on LPA’s, (with apologies to Mr Lush) I would probably suggest to my clients that a valid LPA would be a preferable alternative to a Deputyship supervised by the OPG, given that the latter is often a more expensive and cumbersome process.

However, a Lasting Power of Attorney should not be a document that is casually completed online much as one might complete a grocery order. (The same can be said about wills, but I’ll get started on that one another day!). By completing a finance LPA you are giving someone full rein to step into your shoes and do everything with your money and property that you could do yourself.

When, as solicitors, we are instructed to prepare a Lasting Power of Attorney for a client, we fully explain the form and effect of the document and just what it can and cannot do. The most important decision is who you appoint as your attorneys and we, as lawyers, are trained to ring the alarm bells if something doesn’t seem right. For example, if a person instructed me to appoint a neighbour who had recently moved in as an attorney, rather than their children, the alarm bells would be ringing loudly. In such cases, I would want to raise, explore and resolve those concerns before the document was signed.

On many occasions, clients have raised a question along the lines of, “what if my attorneys sell my house and run off with the money?” My response is always exactly the same, which is, “if you think for one nanosecond that this could possibly happen, you are picking the wrong people”.

Whilst I suspect that many of my professional colleagues will be surprised at Mr Lush’s comments, I think he has a valid point and identified some suggestions for improvement which should be properly considered. An LPA casually prepared without proper advice and put in the wrong hands is potentially catastrophic. Our lawyers really know what they are doing with LPAs and getting proper and complete legal advice from those who know where the pitfalls may be, but also those occasions where a Deputyship may indeed be more appropriate, is surely a far better way to go.

To discuss your requirements for a Lasting Power of Attorney or deputyship, call our FREE helpline on 0808 139 1606 or email us at [email protected]