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

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Is a Lasting Power of Attorney a blessing or a threat?

We specialise in preparing Lasting Powers of Attorney in Devon and Somerset. Call us for details of our charges on 0808 139 1606 or email us at [email protected]

A retired senior judge at the Court of Protection has published a book on 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.

According to press reports, the judge 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. He 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 a lasting power of attorney (for finance and for health matters), regardless of their age or state of health. None of us know when mental incapacity may strike. 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.  A valid Lasting Power of Attorney would for most people 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. 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 spot potential issues. For example, if a person instructed us 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?” Our 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 to act as attorneys.”

A Lasting Power of Attorney 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]