Denzil Lush, until recently the most senior judge in the UK Court of Protection, stated that despite there being an overwhelming amount of lasting power of attorney (LPA) agreements in place, he would never sign one personally.
Mr Lush was very doubtful of the LPA’s ability to protect individuals from unlawful activity, warning that the current system lacks the necessary safeguards.
An LPA agreement allows individuals to choose who they want to make decisions on their behalf, should they lack the mental capacity to make decisions in the future.
But the risks are overstated. These comments, although well intentioned, may scare people away from trusting in LPA agreements, which can actually help protect a lot of individuals.
For those wishing to retain some control beyond their incapacity, the LPA is still the right choice, but in conjunction with some carefully worded conditions.If you suddenly become incapable of managing your finances, your bank would not be able to deal with a trusted friend or relative without an LPA, as you are still the account holder.
Mental Capacity Act imposes accountability and attorneys must act in accordance with the five principles of the Mental Capacity Act 2005:
1. Assume you have mental capacity to make your own decisions.
2. Do not treat you as incapable of making a decision until all practicable steps have been taken to help you make and communicate your own decision.
3. You cannot be treated as incapable of making a decision just because it appears to be unwise.
4. Act in your best interests.
5. Assess if the same outcome can be achieved in a less restrictive way.
These five principles provide the necessary safeguards and anyone can report attorney financial abuse of a vulnerable person to the safeguarding unit at the Office of the Public Guardian.
But a deputyship order not necessarily the answer. A Court appointed deputy must comply with additional requirements:
1. Provide a full list of your assets to the Court at the outset.
2. Purchase a security bond to cover financial losses arising from their failure to carry out directions from the Court.
3. Provide annual accounts to the Court.
Your family (or friend) must pay the Court to oversee their actions – while coming to terms with your incapacity - and this cost will be reimbursed by you.
Rather than being automatically processed by the Court of Protection, an LPA ensures that your affairs are managed by someone you trust, and with the help of a solicitor, you can add clauses to the standard LPA form to prevent any potential abuse.
For example, you could insist that, ‘my attorney must provide annual accounts to three named family members and my accountant’. Is this better or worse than providing annual accounts to the Court? The family members or accountant could report any concerns to the safeguarding unit.
Including such a condition in your LPA would help to alleviate Lush’s concerns that the LPAs “lack of transparency, causes suspicions and concerns which tend to rise in a crescendo and eventually explode".
Retired Judge Denzil Lush’s statement that he would never make an LPA, was an endorsement of a court deputyship order. For those wishing to retain some control beyond their incapacity, the LPA is still the right choice, but in conjunction with some carefully worded conditions.
Amy Lloyd specialises in estate and succession planning for Wright Hassall
