Ticking the box on Financial LPA

[charlie10]

I'm probably overthinking this and making a mountain out of a molehill, but Ill ask you anyway.......

If son has LPA (Finance) for father, and father ticked the box for it to take immediate effect (rather than waiting for loss of capacity) does the son have a fiduciary responsibility for any financial decision made from that point, even if a (poor) decision was made by father without input from son. Also is son responsible for putting father's money in a place that is safe and will hopefully earn interest, even if father doesn't want to do it. In other words, does ticking the box take decisions from the donor and vest them solely in the attorney......if they share it, and donor has 'capacity', how does attorney deal with unwise decisions without being accused of mismanagement. Taking a quote from @concerned4 (thank you) in the "Capacity" thread

CHAPTER 4: SPECIFIC GUIDANCE ON EXERCISING CONTINUING POWERS OF ATTORNEY:

MANAGING THE PERSON'S FINANCES

4.1 You are not obliged to invest the person's estate for maximum profit but you must exercise at least the standard of financial management that he/she would expect.

Hope I've managed to explain my muddled thoughts.....the more I think about it the less it seems to make sense, so I must be missing something vital!

 

[Shedrech]

as I understand it, if the donor has capacity to make financial decisions then the donor is responsible for and in charge of their financial affairs and, as with any adult, can make both good and bad decisions ... at this
point the Attorney is only there to support the donor if the donor chooses and can only act with the donor's permission

it is only when the donor is no longer considered to have capacity that the Attorney takes on responsibility for management of the donor's finances

the box you mention does not mean that the Attorney immediately takes over ... it means the donor has given permission for the Attorney to act on the donor's behalf but only with the donor's permission

 

[Louise7]

TIcking the box does not automatically pass responsibility over to the attorney for poor decisions made by the donor, or responsibility for managing finances.. It means that the attorney can help with financial matters, but only with the consent of the donor. In your case, if your FIL doesn't want to put his money somewhere safe, and makes unwise financial decisions, if he has capacity that's his choice and his son is not responsible.

 

[canary]

TIcking the box does not automatically pass responsibility over to the attorney for poor decisions made by the donor, or responsibility for managing finances.. It means that the attorney can help with financial matters, but only with the consent of the donor. In your case, if your FIL doesn't want to put his money somewhere safe, and makes unwise financial decisions, if he has capacity that's his choice and his son is not responsible.

This is my understanding of it too.

Edit to mention that some people who have stipulated that the POA only comes into effect when capacity is lost have had a very hard time when capacity is indeed lost, but have had to prove that it is the case.

 

[charlie10]

thank you @Shedrech and @Louise7.....I thought it must be something like that but couldn't find anything to confirm it in the paperwork......so again it comes back to that nebulous definition of Capacity!

 

[charlie10]

and snap, @canary......Capacity must be hardest thing to prove.....or disprove

 

[northumbrian_k]

This is my understanding of it too.

Edit to mention that some people who have stipulated that the POA only comes into effect when capacity is lost have had a very hard time when capacity is indeed lost, but have had to prove that it is the case.

That is what worried me because my wife insisted on it and I was expecting at some point to have to 'prove' her incapacity. I haven't had to do so as yet. Her financial affairs are simple and those few financial institutions that have accepted me as her Attorney have never suggested that she might still have capacity. They just seem to have taken my word for it, so maybe I have been lucky. I would be surprised if anyone who met her now could doubt what I have said.