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Lasting Powers of Attorney: A Risk or an Insurance Policy?

View profile for Elizabeth Shepperd
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Lasting Powers of Attorney have existed since 2007 and allow people to appoint up to 4 people to act as their ‘Attorneys’. These Attorneys would step in and manage their affairs for them in relation to either their Property and Finance or their Health and Welfare, if they lose the capacity to do so themselves. Before 2007, Enduring Powers of Attorney had a similar function, although only in relation to Property and Finance.

Attorneys are required to act in accordance with the principles of the Mental Capacity Act 2005 and in the best interests of the people who have appointed them (the ‘Donors’)

For many people, having these documents in place gives a sense of security and acts as something like an insurance policy; they hope that they never need to use it, but if they do, it’s ready to go and people that they trust and chose can step in and deal with their affairs for them.  Creating and registering the Lasting Power of Attorney document takes 2-3 months and it can then be used as soon it is needed.

However, in recent months there have been horror stories in the media about abuse of Lasting Powers of Attorney. Frank Willett, a Dunkirk veteran, was exploited by a neighbour who ran through his bank accounts, took family jewellery and photographs and his war medals. Denzil Lush, a former senior court judge in the Court of Protection, which deals with people who do not have the mental capacity to look after themselves, has stated that there is a lack of safeguards to protect Donors and that more should be done to make people aware of the risks.

So just how risky are Lasting Powers of Attorney? What should you know if you are considering drawing them up? And what is the alternative?

Importantly, when a Donor creates the Lasting Power of Attorneys, they must have full mental capacity and if you instruct a solicitor to prepare the documents for you, somebody qualified to assess this (usually the solicitor or sometimes a doctor) will complete a section of the form to confirm it. This helps to reduce the chance of undue influence being placed on the Donor by prospective Attorneys.

The Donor chooses who to appoint as their Attorneys and so can ensure that they appoint people they trust completely to act in their best interests. Everyone’s situation is unique. In some circumstances choosing a close family member is the right decision. However in others a family friend or neighbour who has the time and required skills may be a better choice. The Donor can also appoint multiple Attorneys. That way if one Attorney is acting improperly, another Attorney can step in and stop them or even have them removed by the Office of the Public Guardian which is the government body that supervises Attorneys.

If a person loses capacity without having Lasting Powers of Attorney in place, that person’s family will be required to make an application to the Court of Protection for a Deputyship Order. This is where the Court appoints a suitable person (the ‘Deputy’) to deal with that person’s Property and Finances. It is very rare for the Court of Protection to appoint a Deputy in relation to Health and Welfare matters and such decisions are therefore left in the hands of medical professionals/social services/etc. As the Court chooses who to appoint, it may not be who the incapacitated person would have chosen had they still had the capacity to make those decisions.

The timescale to obtain a Deputyship Order is another problem – it usually takes 4-6 months, during which time nobody will be able to assist the person who has lost capacity in managing their affairs. The process is also considerably more expensive than setting up Lasting Powers of Attorney, with a £400 application fee and higher legal costs due to there being a lot more work involved in preparing the application.

Once the Deputyship has been approved, there is stringent monitoring by the Office of the Public Guardian, with a requirement to file annual accounts and to pay a security bond into Court which acts like an insurance policy in case the Deputy is found to have acted improperly. 

So, what does this mean?

Although we do sometimes hear about stories on the news of abuse of Lasting Powers of Attorney, these stories are shocking because they are rare. The vast majority of people who rely on Lasting Powers of Attorney only receive benefit from them. It means there is one less thing to worry about for a family at a time of turmoil and stress when they are dealing with a loved one losing capacity, whether through illness or injury.

It is true that ongoing monitoring is not as strict for Attorneys as it is for Deputies, however the subject of a Deputyship has no control over who is appointed and only one person is put in charge of dealing with their affairs. With a Lasting Power of Attorney, multiple Attorneys can be appointed to keep an eye on each other while at the same time taking care of the Donor. If the Attorneys are chosen carefully by a Donor, to ensure that they are people the Donor trusts implicitly, there is very little risk in proceeding.

If you wish to discuss Lasting Powers of Attorney in more detail please contact us on 01825 762281