Advice for attorneys during the coronavirus outbreak
As a financial attorney what should I be doing?
The short answer is that, despite the current challenges we are all facing, the responsibilities of an attorney remain unchanged. Unless the power of attorney document imposes restrictions, an attorney is able to deal with the assets of the person who has lost capacity with all the powers they have in relation to their own assets. The key difference is that the attorney must exercise these powers in the best interests of the person who has lost capacity and must manage the assets for that person’s sole benefit. An attorney can buy or sell property, for example, manage the person’s bank accounts and investments and deal with the person’s tax affairs. Given the current disruption to the housing and financial markets, financial attorneys should seek to ensure that the person’s assets are safeguarded and their exposure to risk remains appropriate in light of the person's overall circumstances.
As a financial attorney is there anything that I am unable to do?
The significant powers that a financial attorney has are subject to the following two main exceptions, designed to protect the person who has lost capacity:
- An attorney is unable to make or change a will on behalf of the person; and
- An attorney is unable to make gifts (which can also include loans) from the person’s assets unless those gifts fall within certain limited exceptions (for example gifts on customary occasions such as birthdays or to a charity the person has historically supported provided those gifts are of a “reasonable” value).
If an attorney wishes to make or change the will of the person they act for or make a gift on their behalf (which falls outside of the permitted scope), they will need to seek the permission of the Court of Protection before they proceed. Failure to do so may result in the Office of the Public Guardian applying to the Court to have the attorney removed from the role. Particular care should be given if the attorney themselves is thinking of accepting a gift from the person’s estate as an attorney must not take advantage of their position.
In order to seek authority to either make or change a person’s will or make gifts in excess of the permitted allowances, an application to the Court of Protection is required. The basis of such an application must be that the proposed course of action is in the person’s best interests i.e. if the person to whom the application relates had the capacity to make the decision themselves (e.g. to change their will or make the gift) then they would do so. It is often in the latter stages of a person’s life (or during a global pandemic!) that thoughts turn to succession and tax planning and therefore this avenue allows an attorney to consider whether the person’s succession arrangements are adequate and otherwise whether action needs to be taken on their behalf.
Seeking advice
Seeking legal advice at an early stage is key in order to explore whether the proposed action falls within the bounds of what is permissible under the Mental Capacity Act. If the approval of the Court of Protection is required we have a wealth of experience advising in relation to applications of this nature.
