Back in the heady days of summer, Denzil Lush, a retired senior judge who adjudicated in 6,000 power of attorney cases during his career, warned people to be more aware of the risks of making a Lasting Power of Attorney (LPA), specifically those covering property and finances. He cited cases where the elderly have left themselves open to financial abuse from unscrupulous attorneys, such as a certain Mr Willett, whose neighbour stole the contents of his bank account and precious war medals. Mr Lush went as far as claiming he would never to make a LPA himself, advocating the appointment of deputies by the Court of Protection as the safer (albeit more expensive) alternative.
If you have not appointed an attorney and you lose mental capacity, a court application will have to be made to appoint someone as your deputy. Deputies are subject to the scrutiny of the court and have to provide a full list of assets and accounts each year, explaining the decisions they have made, whereas attorneys appointed under a LPA don’t. But an attorney still has the same basic duty to act in the best interests of the person who they’re responsible for and the authorities will step in to investigate where concerns have been raised about an attorney misusing money or acting improperly. It is also possible to build safeguards into the LPA itself, for example by placing a limit on the amount of withdrawals which can be made or assets that can be sold without the permission of the Court of Protection. You can also stipulate that certain important decisions have to be made by more than one attorney, and you can appoint attorneys who are independent of each other.
Cases such as Mr Willett’s quite rightly highlight the importance of making sure you chose the right attorneys. Often people make a LPA without taking legal advice and it might be hard to take an objective view yourself on whether the people you intend to appoint can be trusted to carry out their duties properly. One advantage of making a LPA (as opposed to a deputy being appointed by the Court of Protection on your behalf) is that you can choose who should have the power to look after your finances yourself. Discussing the options with a solicitor at the outset can avoid the risks of an attorney abusing their powers later down the line. Your solicitor has a duty to ensure that you properly understand the document that you are signing, the powers you are giving to your attorneys and the risk of fraud and undue influence.
One of the major downsides of not making an LPA and relying on someone making a deputyship application is that it can take up to nine months to complete, during which time no-one will be able to manage your finances and your bank accounts (including joint accounts) may be frozen.
Mr Lush’s warnings should certainly not be ignored. However neither should you ignore making a property and financial affairs LPA altogether, which is still often the better alternative to an expensive and lengthy deputy application, over which you will have no control and which can delay the on-going management of your finances.