Individuals acting under a power of attorney have the ability to replace an accountant or financial adviser who is not serving the best interests of the donor, even if the donor previously appointed them. Experts emphasize that attorneys must act in the donor's best interests, which includes reviewing the suitability of professional advisors.
This situation arises when a person with dementia, who has granted joint power of attorney to someone, has existing professionals whose performance is unsatisfactory. For instance, an accountant may have filed tax returns late, incurring penalties, or a financial adviser may be unresponsive to communication. In such cases, the attorneys can seek to replace these professionals with more competent ones.
Legal Framework and Donor's Wishes
According to the Mental Capacity Act 2005, attorneys must consider several factors when determining if a change is in the donor's best interests. These include the donor's original choice of adviser, any beliefs or values that influenced their decisions, the views of others concerned with the donor's welfare, and any individuals the donor requested be consulted. If the donor is still able to express a view, attorneys should discuss concerns with them. If attorneys are appointed jointly, they must all agree on decisions. If appointed jointly and severally, each can act independently but should still consider co-attorneys' views.
Process for Changing Advisors
Before dismissing existing professionals, attorneys should maintain records of complaints and any attempts to resolve issues with the current firms. It is advisable to give polite written notice to the outgoing firms that their services are no longer required. Once new professionals are selected, formal notice should be given to the previous firms. Attorneys should also request a handover of relevant documents, such as recent investment reports and tax returns, to ensure a smooth transition.
Selecting New Professionals
When choosing new advisors, particularly for vulnerable clients with complex affairs like rental properties, it is beneficial to select professionals experienced in working with attorneys or court-appointed deputies. Prospective advisors should be questioned about their experience with such arrangements and their communication methods. Independent financial advisors must be authorized and regulated by the Financial Conduct Authority.
For donors with dementia who own rental properties, advisors should focus on comprehensive financial planning, including cash flow, future costs, and ensuring the rental portfolio remains suitable. They should also assess future care costs and arrange finances and assets in a tax-efficient manner. Ideally, the financial planner, accountant, and solicitor should collaborate on a coordinated long-term plan.
Documentation and Accountability
Attorneys should keep a detailed record of why they decided to change advisors and why they selected their replacements. This documentation is crucial if the decision is ever questioned by family members, the donor, or the Office of the Public Guardian. The Office of the Public Guardian oversees Lasting Powers of Attorney, which are legal documents allowing individuals to appoint trusted people to manage their affairs if they lose mental capacity.