Power Of Attorney - Attorney Pays For Lack Of Attention

If you accept appointment under a Power of Attorney, it is vital to understand the responsibilities this entails. A recent case demonstrates what can happen if a less than thorough approach is taken,

The case in question concerned arrangements made by a 95 year old widower suffering from Alzheimer’s disease and resident in a care home.  He has previously given his younger son an enduring power of attorney ( EPA) in 2006, which was registered in 2013.

The son acting as attorney under the EPA had for a number of years been his father’s full time carer and had paid out of his father’s bank account sum totalling nearly £100,000 that he claimed were for his father’s benefit, although £11,000 of this sum was repaid. In addition, some £17,000 was paid out as gifts to family members. 

He went to the Court of Protection to seek retrospective approval of the payments and confirmation that he would not be personally liable for them. 

His elder brother opposed the application relating to the expenditure on behalf of their father.

The problem that the attorney faced was that the law permits an attorney “ to do on behalf of the donor anything which the donor could lawfully do by an attorney at the time when the donor executed the instrument”.

The attorney may also apply for funds for the benefit of others, but only within strict limits and these must be relative to the size of the estate.  At the same time, any conflicts must be avoided.  Where a conflict of interest does exist, the attorney is required to apply to the court to approve the payment.  Ignorance is not accepted as an excuse for contravening the law.

It is also permitted for attorneys to pay out sums for the care and maintenance of the person who made them attorney where do so is required and reasonable.

In practice, this means that family members may have their expenses met for providing care and/or services where there is a reasonable alternative to using professionals.

In this case, the attorney had paid out substantial sums for which there was no clear need and had also paid large sums for his own benefit and that of his family. 

The Judge commented that if “one took a step back and considered what the cost of commercial care would have been for this  period of time, the amounts withdrawn by the Attorney represent far less than might reasonably have been paid out……..but I do not accept that on the face of it amounts paid out to an attorney up to a limit of a percentage of the cost of commercial care should be ratified without  further consideration”

It is unfortunate that the attorney had managed matters in a disorganised way and without proper accounting. 

The Judge ordered that in the future a professional was to be appointed to act as attorney in the future.   The Judge disallowed more than £20,000 of expenditure and ordered that this amount should be deducted from the attorney’s share of the man’s estate when he died.