Legal action against Attorneys has skyrocketed, and mostly people aren’t aware they’re doing wrong, write solicitors Ann Stanyer and Jemma Goddard
Court action against attorneys acting under a Lasting Power of Attorney (“LPA”) on behalf of a vulnerable person (known as “the donor”) has risen in the past year, with cases against individuals rising by a staggering 71%, according to the Office of the Public Guardian (“OPG”) annual report for 2017/18.
So, how can attorneys avoid mistakenly abusing their position? It was confirmed in the OPG report that making improper gifts from the donor’s funds was one of two main reasons for the OPG censuring or removing attorneys in 2017/18. Under the Mental Capacity Act 2005, attorneys can make gifts on customary occasions (such as at Christmas, for birthdays or on marriage) to people who are related to or connected with the donor, or to charity. The amount must be ‘reasonable’ in view of the donor’s estate and surrounding circumstances. It is advisable for attorneys to obtain a copy of the donor’s Will when considering making a gift so that they know the donor’s ultimate wishes in respect of the division of their estate and whether the gift accords with these.
If a proposed gift does not fit neatly within the gift-making legal boundaries, it must be authorised by the Court of Protection. If attorneys are in any doubt, particularly with respect to “reasonableness”, they should seek legal advice. Expenditure at this stage can help avoid problems, and greater expense and anxiety, further down the line.
The other main reason for the censure or removal of attorneys is not acting in the donor’s “best interests”, guidance on which is set out in the Mental Capacity Act 2005 and its Code of Practice. Attorneys must consider all relevant circumstances, particularly the donor’s past and present wishes and feelings, and the likelihood of the donor recovering and being able to make the decision for themselves. They should involve the donor in the decisions, so far as practical.
When setting up the LPA, the donor can help attorneys identify what is in their ‘best interests’ by making an Advance Statement of Wishes, Beliefs and Values. This is an informal, non-legally binding document that provides details about the issues that would influence a decision if the donor had capacity. The Statement can cover ethical investing for example, gifts to family members at Christmas, favourite charities and where they would like to live. If there is no such Statement, the attorneys should carry out a proper consultation process by talking to relatives and carers, looking at photographs, visiting the donor at their home to observe their surroundings and lifestyle and analysing past financial transactions.
Finally, one of the simplest things that an attorney can do is to read the Mental Capacity Act Code of Practice so that they are fully aware of their responsibilities and limitations on their powers. There are also helpful guidance notes published on the OPG website to assist attorneys with carrying out their role. Taking legal advice when making your LPA is essential as a good legal adviser should guide the donor on what the role of attorney entails, help them choose the right person for the role and provide literature to pass on to their chosen attorneys so that they can become familiar with their powers and duties.
So, in essence, avoiding problems at the end means getting it right at the beginning. Donors should think very carefully about who they choose as attorneys. Their ideal person might know them well, but are they experienced with managing assets and investments? Do they have time to manage someone else’s affairs as well as their own? In turn, attorneys themselves need to be better informed about what they are taking on, before they say yes, so that they do not make incorrect assumptions about what they can and cannot do. The role of attorney will involve more and more people as the life expectancy of the population increases, so awareness and knowledge is key.
Ann Stanyer is a Partner and Jemma Goddard a solicitor at Wedlake Bell