Lasting Power of Attorney: duties, risks and lessons from a family fraud case

Abuse of power of attorney case is a warning to families, says Yorkshire solicitor. Here, Emma Garfitt from Morrish Solicitors explains how to navigate the tricky field to keep everyone safe and protected.

A recent case involving the abuse of powers of attorney has highlighted the importance of choosing attorneys carefully and understanding the legal duties that come with the role.

A couple from Liverpool were sentenced to six years in prison in 2023 after abusing their position as attorneys for their elderly parents. The couple were convicted of fraud and money laundering after making more than 100 transfers from the victims’ bank account, selling their home and using the money for their own benefit. They have now been ordered to pay back the money within three months or face more prison time.

The case has prompted renewed warnings about the responsibilities involved in acting under a Lasting Power of Attorney.

Emma Garfitt, Partner and Head of Wills and Estates at Morrish Solicitors, says attorneys must be clear that the role is one of trust, responsibility and accountability.

"Being appointed as an attorney is not a right to take control of someone else’s money or make decisions for personal convenience," says Garfitt."It is a legal responsibility to act in that person’s best interests at all times."

What is a Lasting Power of Attorney?

A Lasting Power of Attorney (LPA) allows someone to appoint one or more trusted people to make decisions on their behalf if they lose mental capacity or no longer wish to manage certain decisions themselves.

There are two types of LPA: Property and Financial Affairs, which covers matters such as bank accounts and property, and Health and Welfare, which covers care and medical decisions.

LPAs can provide reassurance for individuals and families, particularly as people get older or if they are diagnosed with a condition that may affect their ability to make decisions in the future.

The duties of an attorney

An attorney must always act in the donor’s best interests. The donor is the person who made the LPA.

This means attorneys should:

• Involve the donor in decisions wherever possible
• Consider the donor’s wishes, feelings, values and beliefs
• Keep the donor’s money separate from their own
• Keep clear records of spending and decisions
• Avoid conflicts of interest
• Take advice where decisions are complex

"Attorneys should be able to explain why decisions were made and how they benefited the donor," says Garfitt.

What attorneys must not do

While an attorney may have authority to manage financial affairs, that authority is not unlimited. Common mistakes and breaches of duty include:

• Using the donor’s money for personal benefit
• Borrowing money from the donor
• Making substantial gifts without proper authority
• Ignoring the donor’s wishes, values or beliefs
• Failing to involve the donor in decisions where they still have capacity
• Keeping poor financial records
• Making decisions for personal convenience rather than the donor’s benefit

"One of the most common misunderstandings is that an attorney can do whatever they think is sensible with the donor’s money," Garfitt warns."That is not correct. The money remains the donor’s money and must be used for their benefit."

The Mansell case demonstrates how seriously the courts treat abuses of power. Attorneys who misuse their position can face investigation, removal from office, orders to repay money and, in serious cases, criminal prosecution.

When family arrangements go wrong

Many people appoint close relatives as attorneys, and in most cases that works well. However, family relationships do not remove the need for proper safeguards.

Problems can arise where one family member is making decisions without transparency, where records are poor or where other relatives become concerned that the donor’s finances are being misused.

"Most attorneys act with care and honesty," Garfitt says."But even well-intentioned attorneys can get into difficulty if they do not understand the limits of their role. Where there is deliberate abuse, the consequences can be extremely serious."

The Office of the Public Guardian can investigate concerns about how an attorney is acting. In serious cases, an attorney can be removed, ordered to repay money or face criminal prosecution.

Choosing the right attorney

Choosing an attorney is one of the most important parts of making an LPA.

The person appointed should be trustworthy, organised and capable of making decisions calmly and responsibly. They should also understand the donor’s wishes and be willing to seek professional advice where necessary.

It is possible to appoint more than one attorney, and donors can decide whether attorneys should act jointly, or in different ways for different decisions.

Planning ahead

Families often put off discussions about LPAs because they feel uncomfortable. However, talking openly about future decision-making can help avoid uncertainty and conflict later.

Before making an LPA, people should consider who they trust to act for them, whether more than one attorney should be appointed and what guidance they would like to include.

"These conversations can feel difficult, but they are far easier to have while everyone has capacity and can express their wishes clearly," Garfitt says."An LPA should be seen as part of sensible future planning, alongside making or updating a will."

Getting advice before problems arise

LPAs remain an important way of protecting individuals and their families. However, the recent case is a reminder that the role of attorney should never be taken lightly.

"The vast majority of attorneys want to do the right thing," Garfitt concludes."The key is understanding the responsibilities that come with the role and seeking advice where needed. Taking advice early can prevent mistakes and protect everyone involved."

Morrish Solicitors' wills and estates services can be provided in-person, over the phone, by email or post. Contact [email protected] or call 033 344 9609. Alternatively, you can make an appointment at one of their offices in Leeds, Bradford, Pudsey or Yeadon.