Daughter Sandra Thomas used her authority under a Lasting Power of Attorney (LPA) to spend her mother’s money on holidays, cars, luxury meals and personal expenses, viewing the spending as early access to her inheritance from the wealthy widow who suffered from Alzheimer’s disease.

When her mother died, the will was challenged and the financial abuse came to light, reaching the High Court, where the judge ordered repayment, ruling that Thomas and her husband misused her mother’s money while acting under the property and financial affairs LPA.

“This case is a reminder that the effectiveness of an LPA rests not just on having one in place, but on choosing carefully who is trusted with that responsibility,” explained Amy Macwhirter, specialist in later life planning at Ward Gethin Archer Solicitors.

“It should not simply be viewed as an administrative task. It is one of the most important financial decisions many people will make, because it gives another person legal authority to make decisions on your behalf.

“The authority given by an LPA for property and financial affairs is very broad and the circumstances in which it may be used range from helping with carrying out simple financial tasks, like paying bills, to taking complete control of a person’s financial affairs if that person has lost capacity. So, it can be very far reaching.”

For most families, an LPA provides reassurance and practical support, but it also creates a responsibility for the person appointed as attorney. They must act in the donor’s best interests, keep the person’s money separate from their own, maintain accurate records and avoid benefiting personally from the decisions made.

The difficulty is that problems may not become apparent until significant sums have already been spent, or after the person’s death when inheritance is challenged, as in this case.

“An LPA is an essential planning tool, but it relies heavily on trust,” added Amy. “The lesson from a case like this is not that people should avoid LPAs. Without one, families can face far greater difficulties if someone loses capacity. The important point is to think carefully about who is appointed and what safeguards can be put in place.”

For some families, particularly where there are significant assets involved or relationships are complicated, it may be appropriate to build in additional safeguards. That may mean appointing more than one attorney, requiring decisions to be made jointly, or asking a trusted professional to provide oversight and review financial records regularly.

Added Amy: “The uncomfortable reality is that much financial abuse happens not through strangers, but through people who have been given access and authority because they are trusted. But an LPA remains one of the best ways to prepare for the future and an essential part of the mix for later-life planning, working alongside wills, inheritance planning and conversations with family about future wishes.

“Just remember that choosing the person who holds the power may be the most important decision of all.”