A report by Helen Morrissey, Personal Finance Specialist at Royal London, the largest mutual life, pensions and investment company in the UK, has called for more education on Powers of Attorney as new data published by a new Freedom of Information request reveals a 40% increase in investigations.
There have been two types of Power of Attorney available since 2007: One coverng property and financial affairs, the other covering health and welfare decisions. 2.3m Powers of Attorney have been registered with the Office of the Public Guardian (the body that oversees them), between 2007 and 2017. 1.6m have been put in place for property and financial affairs and 732,000 relating to health and well-being.
As a proportion of the overall number of Power of Attorney in existence, the volume of investigations is relatively small. 2016/17 saw 69 investigations, rising to 82 in 2017/18. This is due to some strong safeguards being in place, including the requirement to submit an annual return detailing what decisions have been made on an individual’s behalf and why.
Commenting on the figures Helen Morrissey, Personal Finance Specialist at Royal London said: “When done properly the attorney fulfils a vital role in safeguarding the interests of the person they are acting for. However, the sheer number of investigations into the actions of attorneys is concerning and action needs to be taken to curb poor practice. While there have been instances where people appointed as attorneys have used their position to steal money from the person they are acting for, there are also instances where the attorney has unwittingly stepped beyond the boundaries of their responsibilities or have neglected to keep up to date records explaining what they have done and why. People taking on these responsibilities need clearer guidance on what they can and cannot do.”
Redwood Financial View
It’s great to see so many people recognising the need to have Power of Attorney in place and we would encourage everyone to do so. All too often we meet Clients who have not got around to doing it. They have often found their love ones have lost the mental capacity to make their own decisions, resulting in choices about their medical treatment and finances being taken over by The State.
The danger with this latest report is that people could assume that being a Power of Attorney is a specialist skill, to be conducted by a qualified person such as a solicitor. Appointing the right people is one of the most important decisions you will make. We always advise against appointing professional executors, trustees or attorneys. The reason we say this is because when you appoint professionals in these capacities, you tie your loved ones to them and commit them to paying the associated costs these professionals will charge for all and any ongoing work they undertake. Only legal action taken by your loved ones can forcibly remove a professional from these roles unless they agree to resign their position: an action that financially is not in their best interest to do.
We believe you should always use the best professional advisers to help you as little or as much as you and your family need at those most critical times but keep the control in the family.
The Redwood Financial Advisor team are always here to help guide and advise you with all your financial needs to enable you to grow, protect and enjoy your wealth. Why not come to our next FREE Public Seminar at the Botley Park Hotel, Botley on 26th June 2018. This month’s topic is Wills, Trusts & Estate Planning: How to avoid losing family wealth through Inheritance Tax, Care Fees, Divorce or Relationship Breakdown. We also talk about Power of Attorney in this seminar. Book your place online at: Book Me A Place! or call us on 01489877 547. If you’d like to about other financial topics such as pensions then call us to arrange a free Initial Meeting with one of our Advisors.
Royal London have produced a detailed guide: Power of Attorney Explained which we recommend as a very worthwhile read to grow your knowledge.