On this blog site we deal with issues concerning the Court of Protection and elderly care. This might seem to be an odd combination of areas to cover on the same blog, but sadly, when these two areas collide it is often due to fraud, suspicion and inheritance.
There are encouraging signs that more Lasting Powers of Attorney (LPA) are being created. As we have argued before on so many occasions, the benefit of an LPA is that, should someone lose the ability to manage their finances, there is someone there to step in without delay. In these circumstances, time and cost are the two major factors. Appointing a Court of Protection deputy takes months and can cost ten times the amount of putting in place a Lasting Power of Attorney.
So what can go wrong once you have appointed your Attorney? Sadly, quite a lot, and it is normally driven by greed, naivety or a sense of entitlement.
Most people appoint a family member. Unfortunately, a small but growing number of Attorneys are blurring the line between their own finances and those of the family member they are acting for.
At times it is heartless fraud. The loved one moves into a care home, their house is sold and the Attorney, say the son (it more often is a man, not a woman) decides they will retain the sale proceeds as that will avoid paying Mum’s care fees. “Ah” they say to themselves, “it is what Mum would want – she is leaving everything to me anyway.” The problem is that it is theft.
It is sobering that until the Attorney has access to his mother’s money, he is a loving, caring and considerate member of the family. The LPA then allows direct access to Mum’s bank accounts and the door has opened. Mum, in this Attorney’s eyes, is now spending his inheritance.
The number of cases of fraud and theft being reported to the Office of the Public Guardian is on the rise. How many more are detected is a different issue altogether.
I am often contacted when someone is suspicious or concerned about how a family member is managing things.
There is no question that an Attorney will need to be involved in many of the elderly person’s financial arrangements. This can include keeping accounts, sorting tax returns and investment advice, dealing with issues of care funding and benefits. There is one area though that the Attorney will often dwell on and act upon which is outside of their remit – this is tax planning.
For this Attorney, all roads lead back to “my inheritance”. “If I do this now Mum will be fine and there will be less inheritance tax to pay and more for me at the end of the day”. Everybody is happy.
In fact, an Attorney has very limited powers to undertake any type of gifting and the amounts are often very modest. The temptation is to carry on regardless and the Attorney tells himself that “no-one will know”. The reality is that very often people do find out. Other family members become suspicious about a new car, HMRC picks up something during probate, the Local Authority requires information during a care funding enquiry. A defence of “it’s what Mum would want” is simply not good enough.
I am often asked for advice when these issues arise. There are usually solutions and I have made many retrospective applications to the Court of Protection to put things right. Mistakes may be innocent – they may be not. As I say, solutions can be found.
If you are an Attorney and in doubt about whether you need to involve the Court of Protection to sanction a step, then please feel free to email me. Likewise, if you are worried that the affairs of a loved one are not being run properly, we can discuss the solutions.
If you are thinking that a Lasting Power of Attorney is not such a good idea after all, then do not worry. There are many safeguards that we can put in place to make sure that the situations discussed above do not happen.