Is a Lasting Power of Attorney risk-free? Hardly.

Our trustee Denzil Lush recently caused a stir on Radio 4’s Today programme when he explained why he has ruled out ever appointing a Lasting Power of Attorney (LPA) to manage his financial affairs. Denzil has only recently retired as the Senior Judge of the Court of Protection there can surely be few people better placed or qualified to pass comment on the subject.

So what’s wrong with the LPA system? As you might expect our concerns lie around the ease with which it can be abused, intentionally or otherwise.  The Office of the Public Guardian (OPG) has successfully increased the take-up of LPAs by the public through awareness campaigns in recent times. No harm there – it can only be positive to get people thinking about a possible future scenario where they need assistance in managing their affairs. However, they have steadily tinkered with the guidance they provide to potential donors, attorneys and even those tasked with declaring the mental capacity or otherwise of the donor.

Perhaps the most important aspect in all this is the inference, as part of the OPG’s awareness campaign and current information on its website, that there is no alternative to LPAs when it comes to managing the affairs of people with diminished capacity. This is clearly not the case as we also have a system for deputyship in this country. For those unfamiliar with the fundamental difference between the two, LPAs are created while the donor still has mental capacity while deputyships are appointed by the Court of Protection when the individual no longer has capacity. But the differences extend beyond that.

The truth is that there is considerably more safeguarding involved in deputyships:

  • A deputy has an obligation to submit annual reports and accounts to the OPG
  • A financial security bond is often put in place for deputies to cover any financial losses incurred by the person without capacity abuse of the process
  • The deputy receives considerably more support in discharging their duties than an attorney under LPA
  • A much wider range of views from interested parties such as family members can be considered by the Court when appointing deputies

There have been dissenting voices in response to Denzil’s declared position. Some say that LPAs are enacted without problems in the majority of case. That may be true but we know, both from Denzil’s experience and from the many calls we get to our helpline, that when LPAs go wrong they can have devastating effects. Critics also point out the additional costs in running a deputyship. True again, but these fees are small change in comparison to the costs likely to be faced if an LPA goes wrong.

AEA in England is going to be looking at this issue in much greater detail over the coming year. We think that change is needed but also that everyone involved in the LPA process deserves more thorough, impartial guidance to help make genuinely informed decisions.