According to OPG figures published in the Times, the number of people applying for Lasting Powers of Attorney in the year to April was 759,976 – a significant jump from the 52,492 applications made 10 years ago. The climbing numbers is thought to be a result of a population that is living longer and therefore more at risk of developing dementia.
A Lasting Power of Attorney enables the person making it – called the Donor – to nominate someone they trust to manage their financial affairs. Once registered, the power can be used at any time with the permission of the Donor – making it a useful document to have, even if the Donor never loses mental capacity. A separate Power is available to nominate someone to make health and care decisions although this can only be used if the Donor loses capacity.
If a person does not make a Lasting Power of Attorney (LPA) and subsequently loses capacity, an application must be made to the Court of Protection for a Deputyship Order. This involves substantially more expense and delay which can be avoided if an LPA is made in advance. Further, the person applying for the order may not be the person who the donor would have chosen themselves.
There is a clear case for LPAs – but whilst applications are soaring, so are family disputes, with 38,945 orders made under the Mental Capacity Act in 2017 compared to 16,407 in 2008. These orders related to challenges in respect of decisions that an existing Attorney has made. However, there are yet more cases that do not go to Court and are therefore missed in the official numbers. One such case reported in the Sunday Times involved a feud with between a father and his daughter over his late mother Beryl Smith’s estate.
Mrs Smith had previously made a Will with her second husband which split her estate between seven people including Peter, his ex-wife Linda and Mrs Smith’s Granddaughter Lisa Martin. Fred died in 2011 and Peter was granted a Lasting Power of Attorney soon after.
Mrs Smith died in 2015 aged 95 – but when Lisa enquired about her Grandmother’s estate, she learned that her father had disposed of Mrs Smith’s beachfront house but had not shared the proceeds. Lisa also discovered that the property had sold for just £1 million which the family claim was less than its true value. Further, a substantial part of her late Grandmother’s estate was missing, including shares, savings and premium bonds worth £200,000.
Lisa later discovered that her grandmother had drawn up a new Will in 2013, a year after she had been diagnosed with dementia. The new Will left the entire estate to Peter except £100 which was left to Lisa. Peter claimed his mother had changed her Will on discovering some of her jewellery was missing. In response to the feud he stated that he inherited everything because he was Mrs Smith’s only child.
Lisa contacted the Office of the Public Guardian, the body that registers LPAs and protects people who do not have the mental capacity to make certain decisions for themselves. Following a police investigation, her father was arrested in 2016 but was released without charge. It is reported that in 2017 he purchased a nightclub in Lanzarote for £200,000. Now Lisa’s only recourse is to make an inheritance claim which ultimately could mean a hearing in the High Court. This could be based, for example, on lack of mental capacity when the Will and Lasting Power of Attorney was drawn up.
There are lessons to be learned from the dispute. Whilst a Lasting Power of Attorney gives you the ability to nominate your own choice of person to manage your affairs rather than leaving things to chance, it also puts a lot of power into their hands. It is important therefore to choose someone who you completely trust as your attorney. It is also possible to nominate more than one person and to decide whether they must act ‘jointly’ (i.e. they must make all decisions together), ‘jointly and severally’ (i.e. they can make decisions together but don’t have to) or jointly for some decisions and severally for others. This adds a further layer of protection, particularly where attorneys must consult regarding high value transactions.
Finally, making a Will with a solicitor can help ensure that your wishes are carried out on your death. In the event of a dispute, the fact that a solicitor has taken instructions from you, made comprehensive notes, drawn up a Will and effectively certified that you have the requisite mental capacity to decide how your assets should be distributed, is strong evidence in favour of the Will accurately representing your last wishes.
For advice on making a Will and Lasting Power of Attorney, get in touch with our Later Life Planning Department on Southport 01704 532890 or Liverpool 0151 928 6544.