Power of Attorney Misconduct Investigations Up by 44%

Newly released data shows that investigations into those acting with power of attorney have increased by 44% in the last year.

Following a Freedom of Information request, it was revealed by the Ministry of Justice that the Office of the Public Guardian completed 1,729 investigations into the actions of those acting as either attorneys or deputies between 2017-18. This marks a significant rise from the 1,199 investigations carried out in the 2016-17 tax year.

Being granted power of attorney allows a person to make decisions on behalf of another person who appoints them to do so, should they become unable to do so themselves.

A deputy is appointed by the court to hold the same powers in cases where a person has already lost mental capacity to make decisions and cannot grant power of attorney themselves.

In both 2016-17 and 2017-18, the majority of investigations involved attorneys – often relatives or friends of the donor without legal training – instead of court-appointed deputies. Indeed, just 82 of the 1,729 investigations conducted in 2017-18 involved deputies.

The figures have prompted financial specialists to urge that more education and training should be given to those accepting a power of attorney, with speculation that in many cases, attorneys may have “unwittingly stepped beyond the boundaries of their responsibilities or have neglected to keep up to date records.”

Partner and expert in wills, trusts and probate, Jacqueline Almond, commented:

"We encourage individuals to enter into Lasting Powers of Attorney to ensure that they choose who will be able to make decisions for them in the future if they are unable to do so. In many cases this is preferable to the appointment of deputies because of the cost and increased administration. However, as deputies are directly supervised by the Office of the Public Guardian there is more control over what they do and therefore less chance of mistakes or deliberate mismanagement. It is important that attorneys understand their role and in particular the limits on it. They need to know that their ability to make gifts is very limited without first of all seeking the court’s permission. In my experience, this is a common misconception".

Attorneys advised to consider position thoroughly before accepting

Powers of attorney are granted by a donor using a Lasting Power of Attorney (LPA) document, to one or multiple attorneys.

There are two forms of LPA: those to grant power over health and welfare decisions, and those to grant power over property and financial decisions. All LPAs must be registered with the Office of the Public Guardian.

When acting under power of attorney, it is important to keep clear and updated records detailing any actions taken on the donor’s behalf and the reasons for this decision.

Prospective attorneys are advised to thoroughly discuss their potential role with the person appointing them, to ensure that they are comfortable with carrying out a person’s wishes in sensitive circumstances, for example regarding medical treatment.

Instructions should also be supplied by the donor in as much detail as possible to ensure that the attorney is able to show that they are acting in accordance with the donor’s wishes.

LPA applications up as average life span increases

Where power of attorney is granted over financial decisions, it is important that an attorney keeps the donor’s money clearly separated from their own.

The decision to gift others money from a donor is generally advised against.

Under the Mental Capacity Act, an attorney must be able to show that any gift is both reasonable, in line with the donor’s wealth and justifiable – for example, as a wedding gift to the donor’s children, or to help someone with whom the donor has a prior relationship of financial support.

Many LPA investigations involve confusion around what donations an attorney is able to make to others, with the donor’s own money.

However, while the rise in investigations may underline a lack of awareness regarding the limits and requirements of acting with power of attorney, officials say it also points to the growing popularity of LPAs, as people begin to live longer.

A spokesperson for the Ministry of Justice notes not only “a rise in the number of people registering for powers of attorney” but also “improvements to the way suspected breaches are handled” as potential reasons for the heightened number of investigations.

“Safeguards and guidance are already in place to support donors and attorneys and, in the rare event of any breach of trust or mismanagement, we will always take robust action,” the spokesperson adds.

Experts in wills, trusts, probate and power of attorney matters

Contact IBB Solicitors today for expert advice on lasting power of attorney. Please call us on 03456 381381 or email estatemanagement@ibblaw.co.uk.