New Bonds to protect LPA donors

 In Elderly/Vulnerable Client, Finance & Investments

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LPA Bond

A new Security Bond has been developed to protect Donors under a Lasting Power of Attorney (LPA).  The Bond will give Donors the peace of mind knowing that their financial assets are protected from misappropriation, theft or an honest mistake by an Attorney. Premiums start from just £99 for the lifetime of the LPA.

News of this bond’s development has been consistently welcomed at many conferences, Deputy Days and meetings.  One example was the excellent Frenkel Topping Day in 2019 where members of the panel were not only enthusiastic about news of the new bond but also suggested that making it mandatory would be the only way to protect every Donor.  The mandatory status may never be enforced but the bond can start to protect NOW.

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For nearly 40 years financial protection has been available to cover the dishonest actions of Receivers and then Deputies appointed by the Court of Protection to look after someone else’s financial affairs under a Receivership/Deputyship.  Millions of pounds have been claimed to the benefit of “P” when assets have been misappropriated.

In 2019 the Office of the Public Guardian ran a campaign called “Your voice, Your Decision” aiming to provide access and information to encourage more people to use LPAs to prepare for the future.

Planning for the future is an important message but the misappropriation of funds, when the LPA has been used, has been well documented for many years.  There is no provision for financial accountability and misappropriation can leave Donors penniless.

The position of Retired Senior Judge Denzil Lush is well known but he has welcomed the launch of the new Bond commenting:-

“I wouldn’t consider going abroad unless I had travel insurance, just in case something went wrong.  Fortunately, I haven’t needed to make a claim on my policy yet, but paying the premiums hasn’t been a waste of money, because it has meant that I have been able to rest assured.  Similarly, I wouldn’t contemplate venturing down the LPA route for the future management of my property and financial affairs without a Bond in place.”

We have witnessed the care taken by professionals to ensure that Donors not only have the capacity to make an LPA but that they are not being coerced into handing over control of their finances.  Your efforts in ensuring the Donor is protected at the beginning will continue throughout the lifetime of their LPA if a bond has also been put in place.

The bond can allay fears when family members or friends are appointed above others, and could even act as a deterrent to an Attorney knowing that they will be held responsible for missing funds and assets where they would doubt a Court case would be carried through.  There is cover for an honest mistake by a Lay Attorney recognising that the job role is not an easy one.

Not only does the Lasting Power of Attorney Bond have all the advantages of the Deputy Bond – it has more:-

  1. Cover for an honest mistake by an Attorney
  2. Cover for the Donor if an Attorney carries on with an application when they are bankrupt, or become bankrupt during the tenure of an LPA but don’t report it to anyone
  3. Cover when an Attorney has ignored or missed a time-restriction contained within an LPA
  4. 14 day cooling off period for cancellation of the cover by the Donor
  5. Only one single payment is required for the lifetime of the LPA
  6. No joint and several liability with other Attorneys
  7. Substitute Attorneys can be named on the bond from the outset
  8. Access to a 24 hour Legal Helpline

History has taught us that there are spikes in claims during recessions and with news of financial difficulties for many people around the corner, this is a crucial time to make sure financial safety nets are in place.  The subjects of the majority of claims will be the very people that will be appointed under a Lasting Powers of Attorney – family members, neighbours and friends.

Who knows what will happen in the coming months and years but the Donor will have peace of mind that, if the worst does happen and their financial assets are used for purposes other than their own best interests, there is something that can be done at last.

The bond will be there for Professional Deputies to call in when they have been asked to take a case where assets have been depleted under an LPA and there is little left.  If assets are replaced, the case does not necessarily fall into the pro bono category often needed meaning more cases can be taken comfortably.

Why not mention the bond if your client comes in to change their will?  The bond can be bought at any time as long as the LPA has been registered.


SECURITY BONDS LIMITED “A POTTED HISTORY”

The 2 Directors of SBL, Lynne Coombes and Paul Holton-Frances have worked for some of the largest insurance brokers in the world in the surety bond sector.  They set up the new company in 2018 to continue to investigate the provision of new bonds for Appointees (launched in 2018) and Attorneys as a way of financially protecting vulnerable people.  They have now been joined at Board level by Dave West who brings the total aggregated experience in security bonds to over 50 years and more importantly, they have fulfilled their promises to investigate and launch new Bonds that will protect people who have someone appointed to look after their financial affairs.

A Bond for Powers of Attorney has also been launched in Scotland.

For more information, request a pack or for your clients to apply for a bond:-

Please visit www.securitybonds.co.uk or email lynne@securitybonds.co.uk.

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