Powers of Attorney – Why you should be careful who you trust with your finances

Powers of Attorney – Why you should be careful who you trust with your finances


Giving someone else power of attorney over your finances can be a useful means of ensuring that your affairs will be properly managed if you lose the capacity to do so yourself.

However, one case in which a war veteran’s money was plundered by a man he considered to be a friend shows how sensible it is to entrust such powers to professionals. The pensioner, who fought in the Second World War, granted his friend an Enduring Power of Attorney when he felt that his faculties were waning. After he developed dementia, his attorney used his position to fleece him of large sums of money. He used the cash to pay off his own debts, to buy supplies for his business and sold his house, war medals and family photographs before pocketing the proceeds. The pensioner’s family sounded the alarm. The man pleaded guilty to two counts of theft and was jailed for four and a half years. In dismissing his challenge to the length of his sentence, the Court of Appeal noted the emotional distress suffered by the pensioner’s daughter and wider family. The man had used his legal status to exploit the vulnerable pensioner and it was a nasty case, involving a grave breach of trust. In those circumstances, his punishment was neither wrong in principle nor manifestly excessive. In a case like this, the only redress the family will have is to try to recover their losses from the perpetrator’s assets. In practice, this isn’t easy as the sums taken have more often than not, been frittered away.

Using an individual of repute as your attorney means you can rely on them to act in your best interests and carry out the tasks involved in a professional manner.

Another case in which a son abused his position as an attorney to squander £230,000 of his frail mother’s money underlines the need to employ the right attorney to manage your finances if you lose the ability to do so yourself. The son used the authority his mother had conferred on him to take control of her finances after she developed dementia. He took the opportunity to sell her home which was her biggest asset and paid the proceeds of sale into his own bank account. By the time she died in a care home some years later, all the money had been spent. Although, by her will, the woman had left her estate to be divided equally between her two children, there was nothing left for her other son to inherit. After the dishonest son admitted theft, he was jailed for three and a half years. The facts of the case emerged as the Court of Appeal rejected his appeal against that punishment as misconceived. His plea that his mother had approved his expenditure during periods of lucidity was patently untrue and his sentence was appropriate.

You can protect your interests by ensuring that you ask a professional for advice on who is best to appoint as your power of attorney, and how to go about appointing them. You may perhaps consider appointing two attorneys to ensure there is a replacement, should your first attorney not be able to fulfil their duties. Alternatively, you can appoint a professional to act as your lasting power of attorney. By doing so, this will give you the added assurance that all legal issues will be handled appropriately.

 

Ravinder Sandhu

Ravinder Sandhu

Solicitor, at Sydney Mitchell LLP

Ravinder Sandhu qualified as a Solicitor in 2002 and has over fifteen years of experience in her chosen fields, the last few years being at Sydney Mitchell LLP. Ravinder deals with Wills and Inheritance Tax planning, Probate and Administration of Estates, Trusts creation and administration, creation, registration and use of Lasting Powers of Attorney, registration and use of Enduring Powers of Attorney, Court of Protection Applications. She is a member of the Society of Trust and Estate Practitioners (STEP) and is a fully accredited member of Solicitors for the Elderly.

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