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The misuse of Powers of Attorney – what can you do? We are consulted regularly by distressed clients who feel that the family member or friend who has been appointed as a Power of Attorney (POA) for an elderly relative is abusing their position to extract funds or assets unfairly. What can be done? The first question has to be – What powers does the POA actually grant? There are different types of POA’s, depending on the circumstances and purpose. If you have full mental capacity, but want or need someone to act for you while you cannot do so perhaps due to a hospital stay or absence abroad, you can make an ordinary Power of Attorney which will only last as long as the time scale you have provided for, and only as long as you have full mental capacity. The problems that occur within families more usually involve the administration of a Lasting Power of Attorney (previously called an Enduring Power of Attorney] which is designed to give powers to the attorney after the donor becomes mentally incapable of dealing with their own affairs. This is a complex issue, and in the first instance a medical certificate would be required for power of attorney to come into force. These Lasting Powers of Attorney (LPA) can be of two separate types, either for financial decisions or for health and care. In many cases separate lasting powers of attorney are drawn up for each, possibly with different attorneys being appointed. So, for example the donor may wish a financially astute relative to deal with his finances and property matters, but may prefer a different relative who has been looking after him and knows his medical condition and wishes to deal with his health and care issues. Where there is a substantial estate involved, or where the person who perhaps is now suffering from dementia is moved
into a facility such as a care home of which other family members do not approve for various reasons (including cost) this can be the source of huge dispute. So, for example, in a case in which the donor of the LPA was moved into the attorney’s home, and their valuable property sold this was this cause of some concern for the rest of the family, not only in relation to the care the donor was receiving, but also because the funds realised from a sale of the property were transferred to the attorney as an alleged gift. This raises a very particular issue which is at the core of problems of many disputes over the exercise of LPA’s - the question of undue influence of the attorney over the donor of the power. Just because someone lacks the mental capacity to deal with day to day finances, does not in law meaning that they lack the mental capacity necessarily to deal with substantial property matters such as the gifts of assets.
in order to form an opinion as to whether there is a problem in the exercise of the attorney’s powers. The Special Visitor, who should have medical qualifications, should also look at all medical reports and take into account the conditions under which the donor of the power is then struggling so, for example, vascular dementia will demonstrate quite differently to Alzheimer’s disease. If the family is not satisfied with the result of the public guardians report by the special visitor, an application can be made further for this to be reviewed viewed by the court. This is a complex an important issue which is becoming more and more relevant as the numbers of frail and elderly people suffering from dementia increase.
Penny Raby SPG Chairwoman 2021 – 2022 Please contact me at pennyraby@harmony-house.co.uk
Penny Raby & Co can advise and represent family members in these difficult disputes, both attorneys concerned that their actions should not be misunderstood, and family members worried that care or finance issues are being mishandled by the attorney. In most cases it is possible to reach a settlement without a full trial of issues, which is particularly important my families are facing potential disputes which may cause permanent rift through the generations.
It is understandable that this leads to problems, because it is possible for an attorney to drain the assets of the donor and thereby prejudice the interests of the other potential beneficiaries of the estate upon the donor’s death. The question is - What is the capacity of the donor at the time the alleged gift is made? This is above all a medical question, and a medical opinion should be sought by the attorney on this specific point before accepting any gift. However, this is frequently honoured only in the breach, and therefore the rest of the family is left wondering what they can do to question the transfer of substantial assets to the attorney which appears to be inappropriate. In these instances one can apply to the Office of the Public Guardian for a Special Visitor to attend upon the donor of the LPA, and interview them separate from the attorney and in circumstances in which they will not be influenced by the attorney,
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