Lasting Powers of Attorney – How To Protect Yourself From Exploitation

ITV recently investigated the very concerning issue of vulnerable people being exploited after executing Lasting Powers of Attorney (LPA’s). LPA’s are legal instruments which grant family members and other third parties (the attorney(s)) the power to deal with the donor’s affairs if the donor should lose mental capacity. LPA’s will generally come in two forms:

  1. Health and welfare; and
  2. Property and financial affairs.

Health and welfare LPA’s enable the attorney to make decisions about important medical treatment, whilst property and financial LPA’s give the attorney the ability to manage the donor’s personal finances and assets. ITV’s feature recently highlighted that financial LPA’s are in a number of cases, being used as a means of committing financial abuse.

It is not clear how frequently this happens, and we may never know as those being affected are in no position to be able to report it. It is usually discovered later by a relative or friend, often following the death of the donor and whilst it is possible to recover sums from the rogue attorney, this does not prevent it from happening in the first place. When the attorney is the only person close to the donor, they may bank on the possibility of never getting caught.

Minimising the Risks

The question therefore is what can be done to minimise the chances of fraud or abuse. A key worry is that LPA’s can be made very easily online, and although the donor must execute the document, the document itself is not necessarily created by the donor. The Office of the Public Guardian‘s website allows any registered user to create the LPA, and all that needs to be done is to have it executed (signed by the donor in the presence of two witnesses) and then registered for a fee of £82.00.

A donor considering executing an LPA, or being asked to create one, should always seek independent legal advice first. The solicitor can not only explain to them how the LPA works, and help a donor draft one that sets clear restrictions on the attorney’s powers, but if there are any concerns about the donor being taken advantage of, coerced, or not really understanding the process, this can be identified before the LPA is executed.

It is also a good idea to appoint more than one attorney, and the second attorney can be a solicitor or another trained professional. The professional in question need not be actively involved from day to day, but can keep a watchful eye over things to make sure that the primary attorney is acting fairly. Some people do appoint replacement attorneys but a note of caution however – a replacement attorney is not the same as a joint attorney. A replacement attorney only usually has power if the primary attorney cannot continue. Whilst the primary attorney is in place, the replacement attorney is not involved at all.

Finally, there is no harm in telling friends and relatives about the LPA. This means that someone else will know what is happening and can intervene if they believe an attorney is acting unfairly, beyond the scope of their powers, or against the donor’s best interests.

In the event of an accusation of abuse, Nelsons’ Inheritance Disputes team have the expertise to assist those accused in defending proceedings brought against them.

For more advice, contact Lewis Hastie on 0800 024 1976, or email newbusinessteam@nelsonslaw.co.uk