Lasting Powers of Attorney: You wouldn’t go on holiday without travel insurance…

Annika Bell, Senior associate in the Russell-Cooke, private client team
Annika Bell
3 min Read

There are always two sides of the story; the individual putting in place a Lasting Power of Attorney (LPA) (the donor) hoping they and their assets will be looked after, and the trusted family members or friends (the attorneys) trying to help their loved ones in the best way they can.

However, as action by the Office of the Public Guardian (OPG) against the misconduct of attorneys has more than doubled over the past two years for the making of improper gifts and not acting in the donor’s best interests, a well-known proverb comes to mind: “hope for the best but prepare for the worst”.

When creating and using an LPA, donors can have better peace of mind and help support their chosen attorneys by following these three steps.

Step 1: Build protection into your LPA

When putting in place an LPA it is most important to choose the right attorneys. You may feel obliged to include all of your children so no one is left out but it is important to consider whether each child is organised, good with money and that they will work well together.

Even if you choose the right attorneys, they are not trained to act in this role and receive little guidance when they sign the document, which is often years in advance of it being used.

One way to help steer attorneys in the right direction when acting under the LPA is to build in safeguards such as a supervision clause, a wish to consult with another or express reference to the relevant section of the Mental Capacity Act 2005.

If you write something in your LPA which does not work in law your LPA may be invalid and so it is important to seek legal advice on the drafting of such provisions.

Step 2: Consider putting in place an insurance bond

If an individual has not put in place an LPA but loses capacity, their loves ones can apply to the Court for a deputyship order. Insurance bonds are a requirement of being appointed under a deputyship order but until recently there has been no equivalent under an LPA.

Whilst it is not compulsory, there are now LPA Bonds available which donors can decide to put in place once their LPA is completed and registered with the OPG.

Retired senior judge Denzil Lush likened an LPA Bond to holiday insurance; he always puts it in place and even though he has never had to make a claim it gives him peace of mind.

The new Bonds include cover for:

  • Misappropriation of funds by an attorney
  • Honest mistake by an attorney
  • Substitute attorneys

Step 3: Keep control of access to your LPA

The OPG has introduced a new system so that donors can:

  • View their documents online
  • Allow people or organisations to view a summary of the LPA
  • Keep track of which people or organisations have been given access

The access code will be available to new holders first upon registration of their LPA. They will be sent an activation key which can be used online to create the account. The donor can then create an access code to provide to organisations so they can view an online summary of the LPA.

This is a newly introduced process but will hopefully provide donors with more control over access to their documents and allow attorneys to help their loved ones manage their financial affairs without having to wait for paper and post.

We can help

An LPA is one of the most important documents you can put in place to help protect and manage your property and financial affairs during your lifetime.

If you would like to put in place an LPA or wish to review an existing Enduring Power of Attorney or LPA please contact a member of our private client team.

Briefings Individuals & families Russell-Cooke Lasting Powers of Attorney Office of the Public Guardian Annika Bell private client