Doing your duty

It is well accepted that fiduciaries who are being paid for their services or hold relevant professional qualifications must demonstrate a higher degree of care or skill than those acting in an unpaid or informal capacity. In March, the Office of the Public Guardian (OPG) published its first ever guidance for professional attorneys: ‘Agreeing to act as a professional attorney – a good practice guide’.

The OPG was concerned that some professional attorneys, including those working in both regulated and unregulated sectors, had not ‘adequately prepared for the role’ of attorney, did not fully understand the extent of their duties, and did not have ‘appropriate discussions with the donor before loss of capacity’ to ensure that they were able to act in the donor’s best interests. There were also practical concerns about how a professional attorney would know when their role would become active, whether due to the onset of incapacity, or at the donor’s request.

While much of the guidance is non-contentious, some of the requirements extend standard practice in relation to lasting power of attorney (LPA) creation and administration. Before accepting an appointment, an attorney, or an assistant acting on their behalf, must have discussions with the donor about the following.

• The nature and effect of making an LPA
• Whether the attorney or their firm has or is likely to have a conflict of interest in performing the role
• Whether the appointment should be joint or joint and several, and the risks associated therein
• Whether the attorney is an individual or a trust corporation appointment. The attorney should meet the donor at least once before accepting the appointment
• Whether the attorney has the relevant skills to take on the role, both generally and specifically in relation to the donor
• Succession planning (the Law Society’s practice note on retirement from fiduciary roles has further guidance on this (tinyurl.com/y98hlu28))
• When the donor wishes the power of attorney to take effect – the OPG guidance states that the attorney’s duties start as soon as the LPA is registered, unless the LPA document states otherwise
• Fees and costs for drawing up the LPA, storage of the LPA, your hourly rate for acting as an attorney, and charges for travel costs and time. The guidance suggests discussing current annual costs with the donor for various scenarios, such as where the power of attorney is challenged or there are care funding issues
• How the attorney will know that they are required to start taking on an active role (eg sending letters twice a year, calls to the donor etc), and determining whether such communications are chargeable. Should communications be tailored for each client? How will the conclusion reached be recorded? If the attorney is charging, it will have an impact on their retainer and duties to the donor, as the client will remain a client of the firm for the duration.

The OPG has also outlined its practical expectations in relation to the administrative matters the attorney should consider.

• How to take, keep and store a clear record of any discussions the attorney or their staff have with the donor about their current wishes, feelings and beliefs. Such discussions are not mandatory, as the OPG recognises that there may be a significant period of time between the instructions being given and the LPA coming into effect.
• How the attorney will determine any changes in the donor’s beliefs, views, wishes and feelings at the time that the attorneyship becomes active. The guidance suggests that the attorney should ask the donor to keep a clear record of the discussion, and key contacts / information.
• A central written record of all attorneyship appointments must be kept.
• What action to take in cases where the donor’s fees are depleted and the attorney can no longer charge professional fees for acting.
• How to protect the donor from abuse if they are unaware that the appointment has become active, particularly where there is a joint or joint and several appointment.
• How other people, such as relatives of the attorney and other professionals, will know of the attorney’s appointment
• The infrastructure within which they work. The attorney should plan ahead for the scenario where each of their attorneyships require action simultaneously.

The requirements in the guidance go beyond the standard practice of many firms when taking LPA instructions. It is unapologetically client-focused, and should be seen as a welcome opportunity to review practice around LPAs, and consider how solicitors can set the bar in terms of good attorneyship practice.