I have spoken to several clients who have reservations about putting in place Lasting Powers of Attorney (LPA), due to the fact that they want to continue managing their own affairs and are concerned that, by appointing an attorney, they are handing over control before they feel ready to do so.

The issue with this point of view is that you can only put a LPA in place while you have capacity.  Most people envision their attorneys acting on their behalf if they do suffer from cognitive decline, however if you wait until you actually need the help it may be too late to appoint attorneys at all.

Of crucial relevance though is the fact that it is only by putting in place an LPA that you actually maintain control over who will act for you if you lose capacity. If you leave it too late (i.e. lose capacity having failed to put one in place), then anyone, including the local authority and people that you might deem completely unsuitable, could apply to manage your finances. Nevertheless, it is only right to be cautious about protecting yourself from the actions of an errant attorney.

It is possible to build in some safeguards: for example, you have to choose at the point of preparing the LPA whether or not you wish your attorneys to act immediately, or if you would only want them to act if you lost mental capacity. We generally urge clients to exercise caution when considering including this restriction (as does the Office of the Public Guardian on the LPA itself), as it is usually more likely for a donor to be physically frail, but still retain capacity, and wish their attorneys to help, than it is for people to generally loose capacity. By choosing to only allow your attorneys to act on a loss of capacity, the attorneys would be unable to help a mentally capable donor, even if that was the donor’s wish. At that point a new power of attorney would be required to give the attorneys immediate authority, as it is not possible to alter a completed LPA. Including a restriction such as this could also create a delay for attorneys who need to act in emergencies, as they would be required to prove a lack of capacity first.

The Mental Capacity Act 2005 (which governs Lasting Powers of Attorney) specifically states that an individual should be treated as capable of making their own decisions, unless every effort has been made to help them to do so, without success. Based on this principle, attorneys should only act with a donor’s consent and knowledge while that person retains mental capacity. Even in cases of diminishing or fluctuating capacity, attorneys are required to assist the donor in making their own decisions, rather than simply making those decisions on their behalf.

If a donor has capacity and feels that an attorney is acting without their knowledge and consent (which should be immediately clear if you have capacity and are actively managing your own finances), then it is within the donor’s power to revoke the LPA at any time (either in whole or part). In this way, the attorney is acting only under the donor’s permission, which case be withdrawn. The process for revoking an LPA is fairly straightforward and the Office of the Public Guardian should be notified as soon as possible that this has taken place, so they can update the digital record in relation to the LPA, which is checked by most financial institutions.

As an aside, I have also been asked what would happen if an attorney was trying to claim a lack of capacity on a donor’s part, meaning that financial institutions no longer involve the donor or send them documentation and the donor is no longer able to revoke the LPA. Having dealt with exactly this circumstance once before, I would recommend that the donor in this situation arranges their own independent capacity assessment to prove ongoing capacity. This can usually be arranged within a matter of days and, with this report as evidence, the donor can then immediately revoke the LPA to avoid further use.

With all of the above in mind, I would state that LPAs are not something to be prepared without having given proper thought to who it is you wish to appoint as your attorneys. An element of caution is good as you are giving a significant amount of control to a third party. As a rule of thumb, you should never appoint someone as an attorney if you feel that you would need to “keep an eye on them”, as this may not always be possible.

I have however heard the suggestion that the risk posed by a rogue attorney can be overcome by appointing more than one person to act so that co-attorneys can monitor each other. I would generally urge caution on this point however. If there are multiple attorneys appointed, but they do not trust each other or are unable to act together due to personality differences, then the LPA is likely to be unworkable as no decisions can be reached.

You should have explicit trust in your attorneys to act in your best interest, and to keep you as involved as possible in how they are managing your affairs, or to stay out of your affairs until you have asked them to act or there is a clear need.

As one final note, it is possible to take out insurance (bonds) to protect yourself from loss caused by an attorney acting inappropriately or perhaps criminally. We always advise that these are considered, and such insurance can provide a final safeguard if ‘all else fails’.

If you would like to discuss Lasting Powers of Attorney, or court of protection applications in more details then please contact Ashley Minott on 01494 893518 or by email.