Mr Culver said: “For convenience, most people elect for the jointly and severally option.
“But careful consideration should be given as to whether this is the right course of action if the attorneys do not get along, they live a distance away from one another or are likely to disagree on big decisions.”
According to Mr Culver, advisers should take note it could be more advisable to opt for a hybrid option and limiting the ‘jointly’ part for major assets or decisions.
3 No replacement attorneys
An LPA set up without a replacement attorney could “cause difficulties” according to Mr Culver, as the attorney would need to be replaced if the original died, refused to act, became unwell or bankrupt.
Without an LPA, a Court of Protection application would be the default option which could be costly and time-consuming.
4 Lack of proper capacity
Mr Culver said it was crucial that a proper capacity assessment had taken place in regards to the donor — the client setting up the LPA for themselves.
He said capacity assessments could be “perilous” and stressed consideration should be given as to whether the adviser was qualified to make the decision over capacity.
“People can at first appear perfectly fine, but can often end up not fully understanding the advice or information given.”
He also noted a “huge red flag” could be that the initial request for an LPA had come from a family member, rather than the client themselves.
5 No safeguards or protections
Advisers should also consider building in safeguards — such as the need for attorneys to produce accounts to a third party each year — or a limit on certain decisions, according to Mr Culver.
He said clients often seemed reluctant to put in such safeguards but stressed it was “essential” the LPA included them.
These can include blanket bans on the selling of property or family heirlooms and also restrictions on gifts and loans.
Kay Ingram, director of public policy at LEBC, said: "Advisers need to involve legal advisers in the setting up of LPAs and both professions need to be aware of the potential for abuse of the LPA. This can provide an extra layer of protection for potentially vulnerable clients."
She added the LPA should be established "well before" it was likely to be needed and the adviser and lawyer should fully understand the donor's needs and wishes in order to coach them on the selection of suitable attorneys.
"LPAs will need regular review to ensure that the attorneys are still willing, able and appropriate to act and where necessary new appointments can be made. Making this part of the regular financial review is a good way to ensure arrangements are up to date."