As we have seen before, entering into a Lasting Power of Attorney (LPA) is an important step for people to take. It seeks to ensure that a person's affairs can be dealt with during their lifetime if that person loses mental capacity and becomes unable to handle their own affairs.
The person appointing the attorney is called the 'donor'. Typically the donor will enter into the LPA and will appoint one or more people to handle their affairs. A donor can specify restrictions to be placed on the Attorney/s but typically a person will often appoint their spouse and children to be their attorneys. We have reported in earlier newsletters on some of the practical drawbacks of appointing only your spouse to be your attorney.
It is important for the Attorney to remember that they are taking on significant responsibilities when they become an Attorney.
In a recent case, the Court of appeal considered for the first time the offence of abuse of position under section 4 of the Fraud Act 2006 in the context of LPAs.
An Attorney must only use such of the donor's funds as are 'reasonably required' for their needs. In the case, the Attorney had withdrawn what seemed to be unreasonably high sums of money from the donor's bank account when compared to the donor's needs. This is an interesting perspective because a person's 'needs' may differ depending on their level of wealth, lifestyle and of course their medical or practical needs.
In the case, the donor was left with insufficient funds but in the absence of any evidence of fraudulent transactions, the Crown Court refused to prosecute. The view of the Office of the Public Guardian differed and they appealed.
The Court of Appeal held that evidence of specific fraudulent transactions was not required. The fact that the Attorney's actions in withdrawing the money had left a 'general deficiency of funds' was enough to justify an accusation of abuse of position under section 4.
To discuss making a LPA or the responsibilities of being an Attorney, contact us.