Law firm  examines the state of play, and provides us with this article from associate Andrew Morgan. He notes that recent data shows 50 per cent year-on-year increase in the number of investigations carried out by the Office of the Public Guardian. 

This publication welcomes this contribution to debate and understanding; it does not necessarily agree with all views of those who send in comments, so please feel free to respond. Email the editor at tom.burroughes@wealthbriefing.com

Solicitors and the financial press consistently urge us to safeguard our assets should we lose the ability to manage them ourselves in the future, and many of us heed this advice.

It can therefore be galling to read stories about the Office of the Public Guardian causing precisely the difficulties the LPA was intended to avoid. 

The OPG carried out 1,886 investigations last year (a quarter of which went to Court), an increase of 50 per cent from the previous year. Some 3,359 complaints were not accepted for investigation. There are a number of reasons why this might be:

1, Demographics: the UK’s population is becoming increasingly elderly. The first half of 2017 witnessed 322,573 registrations of powers of attorney (an increase of nearly 20 per cent relative to the previous year);   

2, LPA donors may have amassed substantial assets over their lifetime, particularly with property in the South East; 

3, Family members may dispute how assets are used and characterise a decision with which they disagree as misuse of funds; and  

4, The UK’s family structures are becoming more and more diverse. It is not uncommon for children to be appointed as attorneys to look after an elderly parent who has remarried. The relationship between the wider family will largely govern whether a mild disagreement can be resolved amicably or snowball into a complaint to the OPG.

However, it is also important to see the OPG’s role in context. Some 1,886 investigations is a tiny percentage of the 3 million registered powers, and when one considers the flip side of the coin, the OPG is clearly doing a vital (if thankless) job.

Attorneys must only use the donor’s assets in the donor of the LPA’s best interests; however the attorney entrusted with those assets is placed in a position of great trust and power, with substantial responsibility. There is ample opportunity to stray from those responsibilities through misunderstanding or wilful default.  

It can be very difficult for a donor to protect themselves from financial abuse, as they will most likely have lost their capacity and awareness of it happening. As a check against this, one of the functions of the Office of the Public Guardian is to supervise, and investigate complaints made against, attorneys (and deputies appointed by the Court of Protection).  

Doubtless, an attorney faced with a complaint will find the process frustrating and expensive, (particularly if faced with legal proceedings).  

Steps can be taken, however, to avoid complaints being made; prevention is more effective (and cheaper) than cure.  

Whether a complaint has been made, or the OPG is undertaking a spot check, existing effective financial management is the attorney’s best protection. With that in mind, they should:

-- Familiarise themselves with their duties, responsibilities and specific powers; 
-- Keep their own finances and those of the donor separate, and
-- Prepare, update and retain accounts of the donor’s finances. 

For the donor, they should consider the terms of their lasting power of attorney, for example, the scope of the attorney’s powers and identity of the attorney. The appointment of a trusted friend or family member can reduce, but never eliminate, the potential for future problems. If the family dynamic is problematic, a professional attorney may be the answer. Whilst the cost may limit this to those with larger assets, it can prove to be money well spent.  

And if a complaint is made, it is better to see this as a sensible check and balance, than to contemplate the financial abuse which might occur if such complaints were not made.