1. cc2468

    cc2468 Registered User

    Apr 13, 2014
    My step father has loaned his son some money in order to get his roof fixed however he is suffering from Alzheimer's. His son has been appointed POA but I can't help but feel this isn't a genuine case as his son has been estranged from his dad from some time.

    Does anyone know if a loan can be granted by the POA (effectively to himself)?
    And if so, are minimal montjly repayment really acceptable?

  2. Katrine

    Katrine Registered User

    Jan 20, 2011
    #2 Katrine, Mar 9, 2015
    Last edited: Mar 9, 2015
    I'm no expert but I would have thought the attorney should get permission from the Office of the Public Guardian before loaning any of his dad's money either to himself or anyone else. The proposed loan agreement should include details of how and when the loan is to be repaid. Attorneys must always act in the financial best interests of the donor, so of course any loan should include repayment at a suitable rate of interest (probably not much nowadays) :rolleyes:

    What the son should not be doing is getting a free loan, or a loan with no repayment arrangements, because that would in effect just be an advance on his inheritance and cannot be in his dad's best interests because it is reducing his available capital.

    It also depends on whether his dad has capacity to decide to make a loan or gift. If he has, then IMO it's not the attorney making the loan, it is the father. The attorney should still be acting in his dad's best interests so he can't just say OK because my dad wants to do this it is fine, I am following his wishes. He still has to ensure that there is a properly witnessed loan agreement.
  3. min88cat

    min88cat Registered User

    Apr 6, 2010
    Just to clarify, are you querying that the LPA cannot be genuine as they are estranged?
  4. stevew

    stevew Registered User

    Oct 30, 2010
    I understand that if a POA wishes a loan / gift to themselves from the patient, an application must be made to the COP.
  5. nmintueo

    nmintueo Registered User

    Jun 28, 2011
    There may not be a perfectly explicit, categorical 'No' to that, but I'd be very wary about it.

    Fiduciary duty
    7.60 A fiduciary duty means attorneys must not take advantage of their position. Nor should they put themselves in a position where their personal interests conflict with their duties. They also must not allow any other influences to affect the way in which they act as an attorney. Decisions should always benefi t the donor, and not the attorney. Attorneys must not profit or get any personal benefit from their position, apart from receiving gifts where the Act allows it, whether or not it is at the donor’s expense.

    Mental Capacity Act Code of Practice

    The guidance here doesn't make it any clearer, either:
    Forms and guidance to create and register a lasting power of attorney.

    Some previous discussions:

    Loans to family members / attorneys

    POA and making loans

    EPA rules on Giving the Donor's Money to Family Members
  6. Wirralson

    Wirralson Account Closed

    May 30, 2012
    As noted above, there is no statutory answer or code of conduct. However, it is extremely dubious. POA holders must act in the best interests of the person on hwose ebhalf they are acting. Any whiff of self-interest, and the COP / OPG tend to take an interest. And the low repayments (if below commercial rates) constitute a taxable benefit in kind. HMRC would be interested in that aspect.


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