Denzil Lush (former Senior Judge of the England & Wales Court of Protection) has been widely quoted in the press, talking about the lack of safeguards with Lasting and Enduring Powers of Attorney (LPA’s and EPA’s) and warning of the risk of abuse by attorneys. He refers to the alternative – the appointment of a deputy by the Court of Protection, as having been ‘demonised’.
An LPA (which replaced EPA’s in 2007) is a legal document which allows you (the donor) to appoint between one and four people (the attorneys) to make decisions about your finances at a time when you may no longer be able to do this for yourself, when it has been registered by the Office of the Public Guardian (OPG). This differs from the appointment of a deputy to manage your financial affairs, which is supervised by the Court of Protection and tends to be used for people who don’t have capacity to make an LPA. You cannot choose this option when you have capacity.
It is true that an attorney is not monitored officially in the way that a deputy would be, but there are other factors to consider:
- Choice – you can choose your attorneys under an LPA and you should only choose people you trust. By their nature, it is most unlikely that you would be able to choose your deputy – and it may be a stranger or someone you would not have wanted to take on the role.
- Set up Costs – other than the registration fee and the costs of using a professional to prepare an LPA (unless you are doing it yourself), there are no other set up costs, unlike a deputy where there will be the cost of the insurance bond, a fee for a medical report and the commencement fee. Unless you are able to deal with this yourself, professional fees to prepare the deputy application are likely to be much more costly, as they take much longer to prepare.
- Ongoing Costs – unless you have chosen professionals to be your attorneys, there will be no ongoing fees to look after your affairs. Most people choose family or close friends. Unless the Court approves a family member or friend to become your deputy, it may be a professional who will charge for the work that they do and there will be ongoing supervision fees payable to the Court, as well as the insurance bond.
- Timing – an LPA can be prepared easily and although there is a statutory waiting period of 4 weeks before it can be registered, they are generally available to be used quite quickly. It can take over 6 months for a deputy to be appointed, which may cause financial problems for the person who has lost capacity, or their family, if they need to provide funds in the meantime.
- Protection when signing – an LPA must include a certificate provider, who signs the form as well, confirming that the donor has understood what an LPA is and the power they are giving to their attorneys and that they were not under any undue pressure to sign it. The certificate provider must be someone the donor has known for at least 2 years or a professional with the relevant expertise. This is not absolutely fail safe, but does offer some protection, particularly in some of the abuse examples cited where the donor has had dementia when they made the appointment. Under those circumstances, no certificate provider should sign.
- Protection before registration – the donor can name a person to be notified when an application is made to have the LPA is registered, so that person has the opportunity to object if they consider that the LPA was made fraudulently or that the attorney is not suitable. The person to be notified would be someone other than the attorney, and again should be someone who would speak up for the donor if necessary.
- Revocation – while the donor still has capacity, they can revoke the LPA.
- Removal of attorneys – the Court will investigate any reported cases of abuse and revoke an LPA if fraud or undue pressure was applied to the donor to get them to sign it or if the attorneys are contravening their authority/ not acting in the donor’s best interests.
There are some horror stories of attorneys abusing their position and it is not possible to guard against every possibility. For those who don’t feel that there is anyone they trust sufficiently to take on this role, or who do not want to appoint professionals, an LPA may not be appropriate. But for many people, a carefully considered appointment, with appropriate instructions and preferences in place within the LPA, will still be their preferred option to ensure that they have chosen the person/people they want to look after their finances if a time comes when they can no longer do this for themselves.