When an attorney has been appointed by a friend or family member to manage money and financial decisions on their behalf, they have a legal obligation to act in that person's best interests. A lasting power of attorney (LPA) for property and financial affairs gives the attorney a significant amount of legal authority over the donor (the person who created the LPA) that must be managed carefully.

Unfortunately, in rare cases, there is a risk that an attorney will use their position to financially abuse a vulnerable person who lacks the mental capacity to manage their own finances. These cases are extremely sensitive, and if you believe someone is experiencing financial abuse by an appointed attorney, it's important to act quickly. At the same time, it can be hard to know where to start or how to prove the abuse you suspect, especially if you don't have access to the person's bank accounts or financial documents.

Thankfully, there are several steps you can take to prevent financial abuse under a property and financial affairs LPA, including legal options that could have an attorney removed or issued with penalties. Approaching this process carefully and correctly is the best way to support someone who has lost mental capacity and may be facing economic abuse by someone they trusted.

Here, the expert wills and probate solicitors at Switalskis explain what decisions can be made under a property and financial affairs lasting power of attorney, the legal obligation that an attorney has to act in the donor's best interests, and the legal options you can pursue if you believe financial abuse is taking place.

What is a property and financial affairs LPA?

A property and financial affairs lasting power of attorney is a legal document a donor to appoint one or more trusted individuals (the attorneys) to manage their money and property. The document must be registered with the Office of the Public Guardian (OPG) before it can be used, and is governed by the Mental Capacity Act 2005.

An LPA should be made while the donor has the mental capacity to make their own decisions, and may be used while they retain capacity with their permission. For example, if the donor consents, attorneys can help with practical financial tasks, such as going to the bank on their behalf. It is important to note that the donor may still have capacity to make their own decisions, but an attorney can help as and when needed. 

Once registered, a property and financial affairs LPA allows the registered attorneys to take over decision-making for the donor completely and to manage their financial affairs. This gives the attorneys significant power over the donor, with the ability to make decisions about:

• Managing bank and building society accounts, including accessing, operating and closing accounts.
• Paying bills and transferring money.
• Paying household expenses like utilities, rent, mortgage and other regular outgoings.
• Claiming and managing state benefits, occupational pensions or tax matters.
• Buying, selling or maintaining the person's property, including their home, if it is in the donor’s best interests to do so.
• Handling investments, savings or shares within the limits of their authority.
• Paying for care costs like nursing home fees, carers or other support services using the person's funds.

The law contains limitations and legal obligations that attorneys must meet, which are designed to protect the donor and prevent attorneys from taking advantage of a vulnerable person's lack of capacity or financial resources. These include requirements that attorneys must always:

• Act in the donor’s best interests.
• Follow the principles of the Mental Capacity Act 2005.
• Keep their own money separate and maintain proper records.
• Apply to the Court of Protection for permission before making certain large gifts or estate-planning decisions.

In practice, this LPA gives wide control over the donor’s financial life, but it comes with strict duties and oversight to protect the donor from misuse or abuse. Failure to meet these requirements may be considered financial abuse, which is a criminal offence that can be associated with serious penalties.

Unfortunately, even if you suspect that an attorney is involved in financial abuse, it can be hard to know whether it meets the legal definition - particularly because some types of financial abuse are intentional, while others might be unintentional breaches of an attorney's key obligations.

What does financial abuse look like?

Financial abuse under a lasting power of attorney can take many forms. Some are deliberate acts of exploitation, while others may stem from negligence, poor record-keeping or lack of understanding of the attorney’s duties. Below, we've offered some examples of financial abuse that are recognised by the Office of the Public Guardian, safeguarding bodies and the courts.

• Using the donor’s money for financial gain or other personal benefit. Evidence of unexplained withdrawals can be evidence that an attorney is making purchases for themselves rather than for the donor’s needs.
• Paying themselves excessive expenses and claiming money from the donor’s account without justification or beyond what is allowed.
• Giving away assets or money to friends, relatives or themselves in a way that is not in the donor’s best interests or outside what the law permits.
• Transferring the donor’s home or other assets or property into the attorney’s name, or selling property or possessions below their value, sometimes to family or friends, to the detriment of the donor.
• Failing to spend money on the donor’s care, and allowing the donor to live without proper food, heating or support while money is withheld or misdirected. This may make the attorney guilty of elder abuse or certain types of physical abuse alongside financial abuse.
• Failing to keep receipts, accounts, or clear records of transactions as legally required.
• Mixing finances, which means using the donor’s account as if it were the attorney’s own. This makes it difficult to distinguish between personal and donor spending.
• Pressuring or deceiving the donor by convincing them to sign cheques, change their will, or authorise spending that they do not fully understand. A will may be challenged on the basis of undue influence in these cases, and a person may be guilty of criminal offences beyond financial abuse, depending on their conduct.
• Excessive charging by a professional attorney such as a solicitor. If fees are unreasonable and charged without transparency, this may constitute professional negligence.

This list of examples is not exhaustive, but it shows some of the key actions that may represent financial abuse. In every case, the central issue is that the attorney is not acting in the donor’s best interests, which is a core duty under the Mental Capacity Act 2005. If you believe that any of the above is taking place and affecting a friend or family member, it is vital to understand your legal options and take immediate action.

What can I do about financial abuse by an attorney?

Depending on the nature of the financial abuse you believe is taking place, and whether you want to raise concerns informally or escalate the matter through official channels, there are several approaches you can take to investigate concerns about financial abuse.

Resolving the issue informally

Before taking action, it can help to gather evidence and document what you have noticed. This might include unusual spending, money going missing, assets being sold without explanation, or the donor not benefiting from the money being spent. Records such as bank statements, receipts or testimony from care staff may help establish a pattern of misuse. If you are not able to access the donor's financial records, you can speak to a close family member about your concerns, or escalate the matter straight away.

In some cases, it may be appropriate to first raise your concerns directly with the attorney. If the issues could be down to misunderstanding or poor record-keeping rather than deliberate abuse, it is often possible to resolve them informally and avoid any legal action from taking place. Because attorneys are required to act in the donor’s best interests, keep accounts and not mix personal and donor finances, speaking to them about your concerns could help them to understand where they are falling short and address any errors in their management.

Reporting the problem officially

If speaking to the attorney did not resolve the problem, or you've decided not to attempt this approach, you can report your concerns to The Office of the Public Guardian (OPG). The OPG is the authority that supervises attorneys, and it has a statutory responsibility to investigate concerns and take action if you suspect financial abuse is taking place.

The OPG has several key powers it can use to address the risk of financial abuse under a lasting power of attorney. It can:

• Investigate complaints about attorneys.
• Demand accounts and records.
• Refer matters to the Court of Protection.
• Apply to the court to remove an attorney if necessary.

Reports can be made online, by phone or in writing, and can be kept confidential if needed. It is often worth working with a solicitor in these cases to arrange your evidence, represent your interests and help you to build a strong case against the person you suspect of abuse.

If you believe the donor is being financially abused and is at risk, you can also raise a safeguarding referral with the local authority’s adult safeguarding team. Your local authority has a duty to investigate under the Care Act 2014 where an adult is at risk of abuse or neglect, and can monitor the person's welfare.

When evidence of financial abuse is referred to the Court of Protection, it can take urgent action, especially when abuse is serious. The court has the power to:

• Suspend or revoke an LPA.
• Remove attorneys.
• Appoint deputies to manage finances in place of the attorney.
• Make specific orders about how finances should be managed.

If evidence is found that shows that financial abuse by an attorney amounts to the standard of a criminal offence, the matter may be referred to the Crown Prosecution Service to consider bringing criminal charges. If money has been stolen or fraud has occurred, you can also report the matter to the police as well as the OPG or the Court of Protection. Attorneys who abuse their position can face criminal prosecution for theft or fraud, alongside civil consequences (such as being removed from their position) by the Court of Protection. A solicitor can advise you on the best approach to achieve the outcome you want.

Do I need a solicitor?

While you can report concerns about an attorney yourself, it is important to work with a solicitor if matters are likely to go to court or lead to a dispute between you and the attorney in question. There are several vital advantages to working with a solicitor in these cases, particularly if there is a specific outcome you wish to pursue.

At Switalskis, we can help you to play a direct role in addressing concerns about financial abuse under a lasting power of attorney. We can start by explaining the legal responsibilities of attorneys under the Mental Capacity Act 2005 and identifying where these may have been breached based on your description of events. If we believe there is scope to take legal action, we can support you to review financial records, correspondence and witness accounts to establish whether there is misuse of funds, and build a strong case.

Our experts can also prepare a formal report to the Office of the Public Guardian, which has powers to investigate attorneys, or apply to the Court of Protection to suspend or remove an attorney, appoint a deputy or make protective orders over the donor’s assets, if you require.

To learn more about how we can help or start the process, call Switalskis today on 0800 138 0458 or use the form on our website to send us a message.