What to do in case you uncover a member of the family is exploiting energy of lawyer for acquire

Suspecting or discovering financial abuse of an elderly person is always a serious matter, but it can be especially painful if the perpetrator is a family member.

Power of attorney is a legal failsafe for people who can no longer handle their own finances, and usually they choose a close relative or friend to take over.

Sadly, some people breach the trust placed in them, and we have looked at how to detect signs financial boundaries are being crossed – not always intentionally.

So what should you do if you think abuse is taking place, particularly if a family member is involved and reporting them to the authorities could cause a rift and personal repercussions.

‘This can be a really emotive area,’ admits Heledd Wyn, partner at Rothley Law and a member of the Step body of inheritance advisers.

‘People can be reluctant to report their suspicions to the police or to the Office of the Public Guardian if the attorney is a family member or close friend, especially if the attorney in question is spending a significant amount of their time caring for the donor.’

Meanwhile, people who think they might be a victim may keep quiet for fear of being restricted in some way, like being prevented from seeing grandchildren. 

What if you suspect someone close to you of abuse?

Lawyer Heledd Wyn advises taking the following steps if you think someone holding power of attorney for a vulnerable person is exploiting this position for their own gain.

– Ask the attorney to share bank statements. Investigating key documents will help ascertain whether abuse has taken place.

If two attorneys are appointed and one suspects the other of financial abuse, both attorneys are entitled to see all the information related to a donor.

– Have an open dialogue. Gently remind the attorney that their actions may not be what the donor would have wanted. Share with them the Mental Capacity Act and the Code of Practice section highlighting how their actions are not technically permitted.

– Highlight the risks, such as having to pay the money back or being reported to the police or OPG, and the implications for them personally. Also, refer them to this government guidance on giving gifts.

Louise Lewis, partner at law firm Freeths and a Step member, says: ‘Being an attorney is a responsible role. It involves fiduciary duties, meaning that you must always act in the best interests of the person who has appointed you.

‘It also means that you must have regard for the Mental Capacity Act 2005 and its corresponding guidance.

‘It is not a role to be undertaken lightly especially as people are stepping in to run someone else’s life for them, as well as their own.’

Lewis suggests checking Government guidance on lasting power of attorney, and notes: ‘It is possible for attorneys to take advice on their role from a solicitor, and the advice can be paid from the donor’s money.’

Where can you turn for help if you suspect abuse?

Louise Lewis of Freeths says you can report abuse of a vulnerable person to the following authorities, and also seek help and advice from lawyers and charities.

– Inform the relevant local authority as its social services department can investigate whether an attorney is an appropriate person to have access to a vulnerable person.

– Tell the police if intentional abuse is suspected, as this falls under fraud and theft. They can investigate and refer the matter to the Crown Prosecution Service.

– Contact the Office of the Public Guardian, which regulates and oversees all attorneys.

Lewis says: ‘People can anonymously report their suspicions to the OPG.

‘The OPG can refer the case to the Court of Protection who can remove the attorney and appoint a panel deputy from a panel of trusted law firms, who then becomes responsible for all the financial decisions that are made.

‘This ensures that annual checks and reporting are in place to protect the donor.’

– Consult a lawyer for advice and to see whether a change in the power of attorney is needed.

Lewis says if the vulnerable person involved still has capacity, you can take them to see a solicitor.

‘You can also gather evidence such as bank statements for potential future legal action to help ensure that money can be reclaimed from the abuser’s inheritance.’

Lewis says a qualified professional can help family members apply to the Court of Protection to replace someone holding power of attorney. Step members who specialise in supporting elderly and vulnerable clients can be found here.

– Speak to Hourglass, a charity focused on the abuse and neglect of older people. Hourglass runs a 24/7 helpline where people can get advice and support on 0808 808 8141.

What happens when abuse is uncovered – sometimes after the victim has died

‘Abuse often isn’t discovered until after the donor’s death, meaning years of silent exploitation may go unchecked,’ according to Lewis.

She says abuse is often uncovered during the probate process, when executors examine bank statements for inheritance tax purposes.

Attorneys are required to declare any ‘gifting’ made in the seven years leading up to death – a strict HMRC requirement – which means a law firm advising the executor of an estate will go through seven years’ of bank statements.

‘As an executor you have to declare gifts for inheritance tax purposes,’ she says. ‘The onus is on you as the executor to get the reporting right and disclose any gifting.

‘Our advice is always to “over-disclose” when it comes to gifts. Even if you’re not sure, still disclose it as a gift, as solicitors can do a corrective account at a later stage.

‘It’s better to overpay on tax and get the money back at a later stage than underpay and end up having to pay it later with interest and potentially penalties for getting it wrong.’

Lewis adds that if financial abuse is found, the abuser will either have to pay it all back or face legal action, or both.

If the beneficiary of the estate is also the person who took the money during the donor’s lifetime, their share of the estate can be reduced to compensate the rest of the family, she notes.

But Lewis explains that if the vulnerable person is still alive, or if there isn’t enough money in the estate, then civil action can be taken and an abuser’s earnings, savings and assets examined to recoup the money.

Heledd Wyn of Freeths says: ‘Financial abuse can come to light when unusual transactions are observed, such as someone has bought a lawnmower when they do not have a garden, or has changed their shopping habits, shopping in more or less upmarket stores.’

She adds that if HMRC has seen discrepancies, investigations can follow, and if matters are only identified after death, solicitors can help with reclaiming funds.

Wynn says you can also seek advice on claims against third parties such as banks for failing to prevent payments and mitigate against abuse.

‘Financial abuse can amount to theft and fraud, which means that the police may need to be involved.

‘Otherwise, when it comes to reclaiming the funds, solicitors can help by making an application to the court for the recovery of the funds. This might mean the Court of Protection or the civil courts.’