Posted on 7.11.16 by Tasoula Addison
Being made an attorney means that you have been granted responsibility over someone’s finances or welfare. With this role, you have day-to-day obligations and principles to adhere to under the Lasting Power of Attorney, as well as the Mental Capacity Act 2005 and the Code of Practice.
Your key responsibilities include:
- Ensuring you act in the best interests of the donor
- Keeping the donor’s money and property entirely separate from your own.
- Keeping accurate records and accounts of all your dealings as attorney
- Referring back to the Court of Protection before making certain decisions and to comply with any directions given by the Court.
The Best Interests Principle
As you are in a position of trust, you cannot act however you want when managing the donor’s financial affairs, you have to act in their best interests at all times. This includes proper management of donor finances, acting honestly and with integrity, making sure that you don’t benefit from your role as attorney and avoiding any conflicts of interest.
A donor should be included as much as possible in making their own decisions, and efforts should be made to enable their involvement, such as making use of the times when they have mental clarity, explaining things in simple terms or using any other appropriate aids.
As mental capacity is a significant factor in keeping in line with the best interests of the donor, their mental capacity should be judged in respect of each individual decision. As an attorney, you should consider all of the relevant factors before making any decisions on their behalf. Therefore, you should make a detailed assessment of the donor’s position in relation to finances and health.
This should include:
- The donor’s age
- Their health mentally and physically
- Their probable life expectancy
- If they still live on their own, how much longer is this likely to be feasible?
- Do they need care at home to enable them to stay there?
- Can they afford to pay for care at home?
- Does their house need any adaptations and is there money available to pay for this?
- What is the state of their finances?
Effective management of finances
As well as general finance management such as taking care of bills and making sure that the donor receives the full amount of income that they are entitled to, you should review the donor’s financial position overall.
You cannot invest the donor’s money as you would your own, and you must make sure that the finances belonging to the donor are kept completely separate from your own. You may reimburse yourself for any out of pocket expenses that you incur on behalf of the donor, but aside from this, the donor’s money should stay isolated.
Keeping accurate records and accounts
Keeping accurate and detailed accounts is a crucial part of being an attorney. You could be called upon by the Office of the Public Guardian to produce accounts covering the entire period of your role as attorney, so you need to be prepared with accurate records of your financial activity for the donor.
It might seem unlikely that anyone would at any point question your management of the donor’s finances, however unforeseen disputes often arise, between both family members and with third parties such as a care home or local authority. If such disputes do arise, then you must have precise accounts of how you have handled the donor’s finances from day one as an attorney.
Don’t rely on bank statements alone to show your activity; keep detailed records as you go along day by day, and make sure that any unusual or significant expenditure is noted and you retain the receipt.
If you need legal advice
Gorvins have experience acting as professional attorneys, and thus have gained years of experience dealing with these matters. As a result, Gorvins can assist with the preparation of accounts on an annual basis and are well placed to advise lay attorneys on how to deal with things properly. This can also provide a useful “health check” to ensure that there are no other issues that need attention.
Referring back to the Court of Protection before making certain decisions
The power given to an attorney under an LPA has certain restrictions; firstly, the LPA document should be examined before you start to act as attorney, to confirm whether the donor included any particular restrictions when the power was made.
You can only use the donor’s money to provide for a family member where the donor has a legal obligation to provide for that family member- i.e. their spouse or a child under 18. Even then, the attorney can only maintain that person.
Your role is to safeguard assets to ensure the financial security of the donor for the rest of their life.
Consequences for poor attorney management
It has been known for attorneys to be removed from office for failing to keep accurate accounts, and the Court of Protection has revoked an attorney’s authority on several occasions after inappropriate high risk investments were entered in to.
If you misuse a donor’s money, you could be stripped of the LPA and lose responsibility, you also could be prosecuted on criminal charges.
What can you do?
If you are an attorney looking for some guidance on carrying out your responsibilities, you can speak to the Solicitors involved who drew up the LPA.