29 November 2013 by

Keep your friends close, but your attorneys closer

Lasting Powers of Attorney (LPAs) are supposed to protect the interests of people who cannot handle their own finances. Time and again, however, cases crop up where attorneys have either misunderstood their powers and duty to act in the best interests of the donor, or have simply abused their powers – to the donor’s detriment.

A case currently in the Courts is that of John Morgan, who was appointed as attorney by Beryl Gittens. Beryl was in her 90s and suffered from Alzheimer’s. Mr. Morgan is accused of theft, having allegedly gambled away all of Beryl’s money. By the time Beryl died, she had no money left and, according to her family, had to have a ‘pauper’s funeral’. Mr. Morgan maintains that Beryl asked him to gamble the money away so there would be nothing left for her family to argue over. Whether or not Mr. Morgan is guilty of theft or simply carrying out her wishes, questions will remain as to whether or not he was acting in Beryl’s best interests.

The recent Court of Protection case of Re GM is another good example of powers being abused. GM’s nieces were appointed as deputies by the Court, to manage her finances (GM had not made a LPA). The nieces used GM’s money to make gifts totalling over £231,000 to charity, to themselves and to others. They also claimed expenses of over £46,000 including laptops, printers and cars; normally deputies can only claim expenses for sundries such as telephone calls, postage or mileage. In total, they spent over £277,000 of GM’s money and were ordered to personally repay £200,000 to GM. Needless to say, their appointment as deputies was revoked by the Court.

These cases are food for thought for anyone considering how their affairs might be managed if they lose capacity. First and foremost, you should make an LPA rather than wait for the Court of Protection to choose a deputy on your behalf. It is, sadly, not uncommon for a person to make an application to act as a deputy for all the wrong reasons. Second, if you do make an LPA, choose with the utmost care who you want to appoint as your attorney. They must be financially astute, and you must be able to trust them. Consider appointing more than one attorney so the opportunity for abuse is minimised. Finally, encourage your attorneys to seek legal advice on what they can or cannot do; ignorance of the law is no excuse and attorneys who exceed their powers may find themselves personally liable to make up any losses which have occurred.

7 November 2013 by

STOP! Do you need Local Authority permission?

Most people will have heard of having to obtain planning permission and/or building regulation approval for alterations or extensions to […]

20 November 2013 by

Two Degrees Of Separation Consequential Loss in the context of Mis Sold Interest Rate

The Financial Conduct Authority announced yesterday that that the progress being made in the Review Scheme set up to deal with the many thousands of claims arising out of mis-sold interest rate derivatives to small and medium sized companies is “slower than expected” and is leading to continued “customer frustration”.

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