Last week, the television programme “Tonight” dedicated a full episode to the issue of “Elder Abuse”. More specifically, the programme concentrated on the particular issue of financial abuse, or in simple terms, stealing from a vulnerable, elderly person.
The programme quite rightly pointed out that with an ever increasing elderly population, this is a serious issue that needs addressing. It did not however offer a solution to this complicated problem, but it did highlight the issues to be considered when trying to plan for the eventuality of old age and the possibility that a person may no longer be able to deal with their own financial affairs.
If no future planning is in place, then if a person loses capacity (for example by the onset of dementia) there will not automatically be any provision for another person to legally deal with the financial affairs of the elderly person. What often happens is that a person close to the elderly person, commonly a spouse or a child, continues to access their bank account on their behalf, but this is actually illegal and will come to an end as soon as the bank becomes aware of the incapacity. At that point, the assets of the elderly person would effectively be “frozen”, which can cause significant problems if access to their funds is needed to, for example, fund care fees or improvements/repairs/alterations to their property. The solution in those circumstances is for an interested person or persons to make an application to the Court of Protection to be appointed as a Deputy for the elderly person. This process is lengthy, as many forms have to be completed, including a requirement for a medical certificate, and then submitted to the Court of Protection for consideration and hopefully approval. It is not uncommon for this process to take in the region of 6 months, and during this time no-one can access the assets of the elderly person. If a solicitor is involved, significant legal fees will also be incurred, but they will be ordered to be paid from the available assets in due course.
However, there are advantages to the Court of Protection process. Once appointed, the Deputy will have to follow the strict direction of the Court’s Order, and will have to keep detailed records of all financial dealings as they have to produce an annual report to the Court. The Court also has court appointed visitors to ensure that the role of Deputy is being carried out appropriately. The role and power of the Deputy is therefore far more restricted than that of a person appointed as an Attorney under a Lasting Power of Attorney.
If a person plans for the eventuality of incapacity, this will be by way of preparing a financial decisions Lasting Power of Attorney. The television programme highlighted that this procedure is at significant risk of abuse, primarily because of the lack of checks and supervision once the document has been registered at the Office of the Public Guardian. The programme also revealed that the majority of Lasting Powers of Attorney are registered without legal advice being taken, and can even be completed on-line. The procedure is that the LPA document has to be completed, with both the Donor and Attorney or Attorneys having their signatures witnessed. Further, a person called a “Certificate Provider” has to confirm that the Donor has capacity to prepare the document. This person is usually a lawyer, doctor or someone who has known the Attorney for at least 2 years. Once the form is completed, it is then submitted to the Office of the Public Guardian together with the modest application fee (currently £82). Within a matter of weeks, the LPA will be registered and returned to the Donor, and from that moment on it can be used by the Attorney (if the LPA provides for this), without any further recourse to the Office of the Public Guardian. The television programme then highlighted that this is where the LPA system is open to abuse, as unlike the Court of Protection system, there are no annual reviews or checks in place. The LPA will, if it is drafted without restrictions, allow the Attorney to deal with all of the assets of the elderly donor, and will even allow for the sale or remortgage of a house, so it can be seen that this is a massively important document. The programme then gave examples where Attorneys had abused their position and had accessed the assets (savings, and in one example sold a house worth many hundreds of thousands of pounds) of the elderly person without their knowledge or approval. These Attorneys varied from being the son of Donor, to a long standing friend of the Donor. Once these frauds came to light, the Attorneys were charged by the police with offences of dishonesty and ultimately convicted. The Courts generally take a very serious view of such offences, because of the significant breach of trust involved, and often result in custodial sentences, but this does not unfortunately compensate the Donor financially, as the money has often already been spent. As mentioned above, the programme did not offer a solution to the problem, but Adele Hallam, private client advisor at Kirkham Legal, says:-
“We advise all of our clients that they should give serious consideration to the preparation of a Lasting Power of Attorney, as we often see and have to deal with the problems caused when a person loses capacity, without such protection being in place. When we meet with our clients, we carefully discuss their personal circumstances, which includes the nature and value of their assets and their family and friend connections, and ascertain their future wishes and what they would want to happen if they were unfortunate enough to lose mental capacity. We can then advise about the steps that can be taken to protect that client, and this can be by way of appointing more than one Attorney, possibly stating that any decisions have to be made jointly, or by limiting the extent of the power of the Attorney to, for example, only dealing with certain bank accounts and/or not extending to dealing with a property. This is where, in my opinion, it is vitally important that a person seeks legal advice before entering into a Lasting Power of Attorney.”
Adele can be contacted on 0161 393 2299 if you would like to discuss any of the issues mentioned above.
Our Practice Licence Number is 11250.