Pensions 

How to protect the elderly from financial abuse

  • To understand what is financial abuse.
  • To be able to explain the importance of power of attorney.
  • To be able to list the benefits of writing a will.
CPD
Approx.30min

An LPA must be registered with the Office of the Public Guardian. It costs £82 to register an LPA, and separate LPAs are required for “health and care” and “money, finances and property”.

The Court of Protection makes decisions for individuals lacking mental capacity in terms of their health and welfare as well as their property and financial affairs.

Where a person lacking capacity has not appointed anyone under a LPA, the Court of Protection may be the only authority available to appoint a deputy to exercise those powers.

Ideally, a person will set up an LPA earlier in life as a protective measure against potential financial abuse. Taking this step can ensure that clients are placing the decisions about their finances in the hands of someone they trust, whether that is you or another professional person, or a loved one.

It will also remove the possibility of any dispute as to whether the client had mental capacity at the time of creating the LPA.

Jointly or severally?

PAs are not always straightforward and can present challenges for donees. One example of a potential pitfall is where an instrument exists under which two or more persons act as donees of a lasting power of attorney.

If a donor appoints two or more persons to take control of a person’s affairs, the instrument can make those individuals jointly, or jointly and severally, liable.

If the individuals are appointed “jointly”, they must agree between themselves before any action can be taken on behalf of the donor.

Alternatively, “jointly and severally” liable donees can take action without consulting the other donee or donees. 

Either option can present difficulties in a case where, for instance, two siblings are appointed donees and are not in agreement as to how best to manage the affairs of their parent.

Difficulties in reaching agreement may lead to family rifts, but so too can a situation in which one sibling is able to act without approval from another. The appointment of an independent person may be a means of overcoming these kinds of dispute. 

Whoever is appointed as the donee must act exclusively in your clients' best interests. That includes first taking all practicable steps to help clients make a decision for themselves before taking it on their behalf.

If the client cannot make a decision, the donee must have regard to, among other things, how the client has managed their finances in the past. 

If there is no history of the donor spending money in a certain way, the donee must seek the Court of Protection’s permission to do so.

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. What is one of the difficulties with financial abuse, according to the authors?

  2. Who perpetrates the vast majority of financial abuse?

  3. What is the term for the person with authority to make decisions on behalf of the donor?

  4. What do the authors describe as a potential pitfall where it comes to a POA?

  5. What is the best way to protect against becoming vulnerable to pressure, the authors claim?

  6. According to the authors, who else needs to take a muscular approach to tackling abuse of the elderly?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • To understand what is financial abuse.
  • To be able to explain the importance of power of attorney.
  • To be able to list the benefits of writing a will.

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