Why a Lasting Power of Attorney is still the answer

11 April 2018
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Denzil Lush, until recently the most senior judge in the UK Court of Protection, stated that despite there being 2.5 million Lasting Power of Attorney (LPA) agreements in place, in England and Wales, he would never sign one himself.

An LPA allows an individual to choose who they want to make decisions on their behalf should they lack the mental capacity to make those decisions in future.

Mr Lush warned that the system lacks the necessary safeguards and puts vulnerable people and their assets at risk.

However, I believe the risks are overstated. There is a danger that the adverse publicity created by these comments could put even more people at risk if they choose not to make an LPA.

If you suddenly became incapable of managing your finances, even a trusted relative or friend would struggle to help you without an LPA. Remember, your bank will not deal with anyone other than you, the account holder.

Mental Capacity Act imposes accountability

Attorneys must act in accordance with the five principles of the Mental Capacity Act 2005: 

1. Assume you have mental capacity to make your own decisions

2. Do not treat you as incapable of making a decision until all practicable steps have been taken to help you make and communicate your own decision

3. You cannot be treated as incapable of making a decision just because it appears to be unwise

4. Act in your best interests

5. Assess if the same outcome can be achieved in a less restrictive way

These five principles provide the necessary safeguards and anyone can report attorney financial abuse of a vulnerable person to the safeguarding unit at the Office of the Public Guardian.

Where a someone hasn’t chosen an attorney, a Court of Deputyship Order can be applied for instead. Here, the Court would assess the suitability of an applicant. Once chosen, a deputy must comply with additional requirements compared to an attorney:

1. Provide a full list of your assets to the Court at the outset

2. Purchase a security bond to cover financial losses arising from their failure to carry out directions from the Court

3. Provide annual accounts to the Court

Your family (or friend) must pay the Court to oversee the Deputy’s actions – while coming to terms with your incapacity – and this cost will be reimbursed by you.

Adding clauses to an LPA for peace of mind

An LPA ensures that your affairs are managed by someone you choose, rather than the Court of Protection and, with the help of a solicitor, you can add clauses to the standard LPA form to help prevent any potential abuse.

For example, you could insist that, “my attorney must provide annual accounts to three named family members and my accountant”. The family members or accountant could report any concerns to the safeguarding unit.

Including such a condition in your LPA would help to alleviate Mr Lush’s concerns that LPAs “lack of transparency, causes suspicions and concerns which tend to rise in a crescendo and eventually explode”.

As an alternative, you could appoint a number of attorneys to monitor each other. But you may not want several family members scrutinising the management of your finances.

For those wishing to retain some control beyond their incapacity, I believe the LPA is still the right choice, but in conjunction with some carefully worded conditions.

Amy Lloyd is a solicitor at Wright Hassall in Leamington Spa, Warwickshire. She specialises in estate and succession planning including drafting wills, inheritance tax planning, trusts, guarding estates against care fees or potential claims by estranged family members, and mental capacity issues including powers of attorney and deputyship orders.