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Transferring funds using a Lasting Power of Attorney

This news item is in response to an article printed in the Financial Matters column of the Sunday Times on 3rd February 2013 and written by William Kay.

The article gave incorrect advice and a complaint was made to the paper by the Office of the Public Guardian (OPG).

The original article advised one of the paper’s readers to use a Lasting Power of Attorney (LPA) to transfer funds just before the donor's death.

The reader had described a situation where the donor of an LPA has lost the mental capacity to make decisions as a result of dementia and Parkinson's disease. The donor has not made a will. The reader was enquiring as to whether it would be possible to distribute the estate on death, which amounted to around £200,000, without the need to obtain letters of administration.

The reply explained that some banks may distribute large amounts without letters of administration. However, it then went on to explain that a legal loophole could be used, although it may be viewed as "distasteful". The loophole "would be to transfer the money to your personal bank account when your aunt is close to death, and distribute it among the beneficiaries later".

There is no legal loophole- it is fraud and given that the newspaper is seen to be giving 'advice' the OPG took action, forcing the newspaper to apologise and publish a correction.

Speaking about the article, Dawn Joughin, Head of the Private Client Department here at Canter Levin & Berg said: “I was very concerned to read about the incorrect advice being given out in the financial section of a national newspaper. It is vitally important that when dealing with Lasting Powers of Attorney and other matters concerning your finances in later life that you obtain advice from a qualified lawyer and don’t rely on what you read in a newspaper.”

This news item is based on a bulletin provided by Solicitors for the Elderly.

By Dawn Joughin