Family or not, advancing inheritance is theft

When Attorneys are appointed to look after the needs of a loved one – usually a parent – few families expect financial disagreements to arise. But where money is concerned, even the most harmonious of families can end up fighting. For example, disputes may occur if views differ about how money should be spent, especially in situations where not all family members have financial responsibility. 

Inappropriate spending sometimes starts small and could seem insignificant to those involved, but it can quickly lead to more serious activity. Regardless of whether it’s a case of adding a few personal items to their loved one’s grocery shopping, or a serious, meditated breach, any attempt by an Attorney to advance their inheritance without the person’s capacitous consent is theft and should be treated as such.

What does the law say?

The best way to prevent accusations of financial abuse is to ensure that all Attorneys understand the rules and regulations surrounding LPAs and deputyship from the start. Understanding what is, and is not, acceptable could be vital to protecting individuals against allegations of financial abuse in the future.

Section 12 of the Mental Capacity Act 2005 makes it clear that a deputy/attorney’s power to make gifts on behalf of a person lacking capacity is limited to small gifts for customary occasions such as birthdays and Christmas or similar. Anything more than this could be regarded as a misappropriation of funds.

LPA/Deputy best practice

Whilst it’s not a legal requirement, anyone acting as an Attorney should keep careful financial records of the financial decisions made in the best interests of their loved one, to help mitigate the risk of disputes arising. Anybody acting as a Deputy is required to complete an annual report to the Office of the Public Guardian on form OPG102 setting out such information.

Attorneys must also consider their actions in relation to any other appointed attorneys. If appointed jointly and severally, each attorney is entitled to make their decisions in the interests of their loved one and act independently if needed. As differences and disagreements can arise, it is important that attorneys keep solid records of any financial decisions made, in case they need to explain them to others.

What happens if financial foul play is suspected

Naturally, if allegations of financial abuse arise, they are likely to bring a significant amount of family upset, which can make decision-making even more challenging. The family should try and resolve the situation amicably. For example, a ‘simple’ misunderstanding may be resolved by requesting the alleged perpetrator return the money immediately.

There may be instances where allegations can arise without evidence, or situations where the wishes of the vulnerable person concerned may need to be taken into account. For example, it might be in their best interests to accept that “Jane can’t come to visit, unless she is paid for her travel expenses”. However, if money is being taken from the vulnerable person’s accounts, this could be unlawful, particularly if the alleged perpetrators are effectively ‘advancing their inheritance’. In some situations, the individuals concerned might not be aware that they are doing something wrong – especially if payments are what the person had done in the past when it was their capacitous choice.

If irregularities are uncovered, consideration needs to be given as to how likely it is that the money is recovered, particularly if the perpetrator in question has no means of paying it back. It may be appropriate to consider whether legal action is to be taken. However, this does invite serious disruption and heartache for those involved, particularly for the vulnerable person at the centre of it all.

If appointed to investigate alleged wrongdoing by a deputy or attorney, legal professionals may take the decision to report the matter to the police. Other family members might also choose to make such reports. In these situations, what happens next will vary significantly depending on the circumstances.

Prevention is key

The best way for families to manage a loved one’s finances and prevent financial abuse is to be honest and transparent about any action taken and ensure they are knowledgeable about the legal obligations they have signed up for. For those appointing an Attorney, it may be worth considering whether to include safeguards, such as the production of accounts to a third party, in the relevant documentation to ensure things run smoothly.

Key takeaways

• Any attempt by an Attorney/Deputy to advance inheritance without the vulnerable person’s capacitous consent is theft.
• Attorneys and deputies must ensure they understand their legal obligations fully.
• If financial abuse is suspected, the family should seek an amicable resolution, but legal action should be taken if necessary.

For more information, please contact Donna Holmes.

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