My mother died last year and I asked for probate to find out what happened to her bank accounts and home.
She had suffered from dementia and was in an old people’s home. I found out that my sister had access to the bank accounts and was helping herself.
Later, and after my mother was admitted into the home, my sister obtained lasting power of attorney for health and welfare. With this she managed to sell our mother’s house. Is this legal?
Power of attorney: I found out that my sister had access to our mother’s bank accounts and was helping herself (Stock image)
She opened a joint bank account with my mother (before lasting power of attorney) so the bank tells me that the account now belongs to her, and that there is no power of attorney on this account.
All my mother’s accounts were closed and the money transferred, but the bank will not give details.
I don’t get it. How come she could just help herself to everything with an lasting power of attorney health and welfare and what can I do about it, especially as the bank is being rather shy about giving information?
I contacted the Financial Ombudsman but the bank is still retaining information. Just a point that might be important, I live in France and my mother was in England.
Tanya Jefferies, of This is Money, replies: I am sorry to hear of your bereavement last year.
It sounds, from what you say, as if your late mother gave your sister lasting power of attorney over her property and financial affairs, perhaps in addition to an LPA covering her health and welfare.
You believe your sister abused her power of attorney, and she might have done. Yet it is also possible the bank withdrawals, opening and closing of accounts, and the sale of the house were carried out for the benefit of your mother.
We asked a lawyer experienced in this area to explain what lasting power of attorney permits a holder to do, and what steps you can take if you suspect wrongdoing by your sister.
Louise Mathias-Williams, lawyer in the Court of Protection team at Thomson Snell & Passmore, replies: Your mother would have been able to create two types of ‘lasting powers of attorney’, one dealing with property and financial affairs and the other with health and welfare matters.
Louise Mathias-Williams: It is important that, as attorney, your sister acted in your mother’s best interests
It would have been your mother’s choice, as the ‘donor’, whom she appointed as her attorney. More than one attorney can be appointed if the donor wishes.
Your sister could have given instructions to enable your mother’s property to be sold if she was acting under a property and financial affairs LPA.
A health and welfare LPA would not have been acceptable for this purpose, nor for taking any steps on your mother’s behalf in connection with her bank accounts.
What safeguards are there when LPAs are set up?
When creating either type of LPA, a ‘certificate provider’, an independent person, must also sign the document in order for it to be acceptable.
This would have been necessary in your mother’s case.
The certificate provider’s input is considered to be a safeguard against abuse when the LPA is being made.
They must be satisfied that, in their opinion, the donor understands the purpose of the LPA, the scope of the powers they are granting to their attorney, and that the donor is not under any undue pressure to make the LPA.
The LPA must also be registered by the Office of the Public Guardian, which is an arm of the Ministry of Justice, in order for it to be valid.
Provided a financial LPA has been registered, it can be used at any time, whether or not the donor has capacity – in layman’s terms, whether they are competent to act for themselves – although the donor can place restrictions on this if they want in the LPA.
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However, where the donor retains capacity then an attorney must only act with their consent.
What is a holder of power of attorney allowed to do?
An attorney can make most legal decisions for the donor under a financial LPA that a donor can make themselves.
For example, dealing with bank accounts, handling income, settling bills, buying and selling property, and dealing with tax returns are all covered.
Some steps are limited, such as gift-making, and some select matters cannot be handled by an attorney at all, such as making a will for the donor.
Creating a will can only be done by the donor if they still have capacity to understand this process or, if they don’t, with the Court of Protection’s permission.
It is important that, as attorney, your sister acted in your mother’s best interests.
The opening of a joint account where both your mother and your sister were account holders would have required consent from both of them in order for the bank to do this.
You confirm that this account would have been opened before the point at which your mother created the LPA, and so presumably at the time she had capacity to make this decision.
It is the case that, on the death of one account holder, the balance held in a joint account would pass automatically to the surviving account holder.
An attorney should ensure that their assets are separate from the donor’s, and so ideally, when your mother lost capacity to manage her affairs, her attorney should have divided the balance into separate accounts.
You mention that your mother’s accounts were closed and money was transferred but you do not confirm the destination accounts.
The cost of residential or nursing care can be very significant and it is not unusual to need to sell a property in order to make funds available to meet it.
An attorney may also consolidate accounts where fairly small sums are perhaps being held in various different places.
Where reasonable expenses are incurred by an attorney in connection with their role, such as the cost of professional advice for the donor – like an accountant’s fee for preparing the donor’s tax return – travel costs, postage and phone calls, they are also entitled to their reimbursement.
It is therefore possible that your sister may have made bank withdrawals to cover regular day-to-day expenditure on your mother’s behalf following her move into care.
However, as mentioned your sister should always have acted in your mother’s best interests in her capacity as attorney.
An attorney’s duties also encompass keeping accounts and financial records, not benefiting from nor taking advantage of their position and acting in good faith.
What should you do if you suspect your sister abused the LPA?
If you consider that your sister was not acting in your mother’s best interests and your suspicions surrounding financial abuse remain, the personal representatives of your mother’s estate should make further enquiries of your sister such as asking her to produce her attorney’s accounts for review.
The relevant banks should also co-operate with the release of information to help with such enquiries, provided that the request is made by the personal representatives who hold the correct authority – the executor of your mother’s will, or an administrator authorised to act under a Grant of Administration if she did not make one.
The Office of the Public Guardian, which has the power to monitor attorneys, would be unlikely to assist now by investigating the handling of your mother’s affairs during her lifetime, given that she has now passed away and their jurisdiction to act would have therefore come to an end.
If it is not possible for the personal representatives to make such enquiries – if your sister is perhaps your late mother’s personal representative – it would be most sensible to obtain your own legal advice about the scope for pursuing a financial claim against her for recovery of misappropriated assets.
Your lawyer in such a case would probably want to employ the services of a forensic accountant to review your mother’s historical bank statements, so that you may clearly substantiate any allegations of your sister’s misuse of her authority under the LPA.
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