Protect Yourself with a Lasting Power of Attorney
Financial abuse of vulnerable people by those acting on their behalf is on the rise, with investigations into the actions of appointed attorneys soaring to a record high. With the continuing rise in dementia and a population that is living longer, these figures show how important it is that people understand how to act under a power of attorney, and the need for safeguarding and professional input to the process.
A Power of Attorney is a document by which someone - known as the donor - gives another person – called the attorney - legal authority to make decisions and act on their behalf. A Lasting Power of Attorney (LPA) is one that can be used when someone has become mentally incapable of handling matters themselves.
While a Lasting Power of Attorney covering property and financial affairs can be invaluable for those who are housebound or unable to conduct their own affairs, it provides that authority when someone is at their most vulnerable. It is a legally binding document, recognised by banks and other financial institutions and allows the appointed attorney to make financial decisions on behalf of the individual.
Anyone over 18 can set up an LPA, and at any point during their lifetime, as long as they have ‘mental capacity’ to make the decisions involved in drawing one up. The attorneys are most usually someone close, such as a family member or friend, who will be available to help manage day-to-day affairs.
When a person loses mental capacity there is no automatic right for spouses or civil partners, or children, to look after their finances. It means that without an LPA, the Court of Protection will appoint deputies, which can be a lengthy and costly process.
The reported rise in financial abuse most commonly relates to making improper gifts or not acting in the best interests of the vulnerable person.
An LPA, whether for property and financial affairs or health and welfare, is an essential element of lifetime planning if you want to be sure that someone of your choice is enabled to deal with your affairs. But these are critical documents and expert knowledge can ensure they reflect your wishes. Seeking out professional advice to get things right up-front can ensure you don’t become part of the disturbing statistics on financial abuse.