Advice for attorneys

‘It’s what they would have wanted’ is a common response from attorneys who have acted outside of the scope of their authority. 

With over two million registered lasting powers of attorney any incidents of fraud or mismanagement are taken very seriously by the Office of the Public Guardian. The increase in those discharged from their duties is due to better investigations.

The Office of the Public Guardian will take swift action if any abuse is reported and can refer cases to the Court of Protection to revoke a lasting powers of attorney, where wrongdoing is found.

Even where there is no intentional financial abuse, mismanagement is increasingly common with attorneys leaving themselves open to personal liability. With this in mind, attorneys should be aware of the limits to their powers.  

Provided there are no restrictions within the lasting power of attorney, an attorney can usually:

• Sell property at an open market value
• Buy property
• Maintain and repair their home
• Rent out property (although you do need to consider whether once you have paid out income tax, management fees, insurances, general maintenance and repairs the amount is sufficient for needs)
• Manage bank accounts
• Deal with investments (within certain remit)
• Pay bills
• Claim benefits on behalf of the donor for their use
• Liaise with HMRC regarding their tax
• Purchase items needed for the donor
• Claim out of pocket expenses

Perhaps more important than being aware of what is within the limits of their powers, would be for attorneys to be aware of what is outside the scope of their power, such as:

• Making financial gifts to friends and family (unless it’s within the donors usual gifting strategy)
• Managing discretionary funds with a fund manager (unless there are powers within the terms of the lasting power of attorney)
• Paying themselves a fee (unless there are powers within the terms of the lasting power of attorney)
• Mixing their finances
• Making decisions which relate to health and welfare (unless they have a lasting power of attorney for health and welfare)
• Using their position to benefit themselves or make a personal gain
• Purchasing something from the donor at a below market rate without the Court of Protection’s authority
• Tax planning without the Court of Protection’s authority

An individual’s capital will often be tied up in property and other assets, however, when they lose mental capacity their attorney may be to sell these assets in order to pay for care home fees or generate an income. With limited investment and tax planning powers, professional advice should always be sought when preparing lasting powers of attorney.