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Spotting elder abuse: Application of the fraud triangle

Spotting elder abuse: application of the fraud triangle  

At Nicholls Law, we have spent many years fighting to financial abuse, including elder abuse and the abuse of vulnerable adults. We have many war stories and from this, instead of taking battle scars we’ve learnt some valuable lessons. Through our experience fighting to right the wrongs of those who’d take advantage of the elderly we understand fully how to spot the signs. So, we think it’s only right that we share our perspective, so hopefully we can have an active role in stopping this type of abuse.

Sadly, financial abuse appears to be on the rise. Increasing social pressure, fractured families, technological advances and internet banking have all previously been cited to contributed to this (Law Society, 2020). However, we reflect that the circumstances of the pandemic for the last year or so have impacted this further as many vulnerable individuals becoming reliant on other individuals to met there day-to-day needs.

Although we may not realise it, financial abuse is essential a type of fraud.

Regrettably, it has been noted that there has been an “explosion of cases in which the perpetrator of the fraud was a family member”. Reflecting on our experience, we know this to be the case. Most individuals when thinking of fraud or financial abuse will think of con-artist or a faceless hacker as the perpetrator. Which is not to say the vulnerable aren’t at risk of fraud by hacker or con-artist, but with a family member we tend to be much more open and trusting. Sadly, this trust allows a platform for the perpetrator to commit the fraud.

Why are elderly and vulnerable adults targeted?

UK citizens over the age of 50 years old control an impressive 70% of the wealth here, and importantly, many of the seniors do not realise the value of their assets. Particularly, as many of these individuals will be home owners which value would have increased substantially – in the early 90’s average house prices in the UK where around the £100k mark but in May 2021 the average was £284k. But these figures vary a lot, depending on the area. For example, in Essex where we are based, the average house price is over £400k now. Importantly, individuals in this age group are more likely to be lonely and vulnerable, or have disabilities that make them dependent on others for support in their activities and affairs.

Victims of financial or elder abuse can often be reluctant to take action against their abusers because they do not want their care and support to stop, or they may also feel ashamed and not want to admit they’ve been take advantage of.

What is financial abuse?

The WHO define financial abuse of the elderly as “The illegal or improper exploitation of use of funds or other resources of the older person”. This can span a wide variety of actions, and includes a broad spectrum of things. For example, on the lower end of the spectrum, individuals may overcharge for things they’ve purchased, may accept payment multiple times for one thing, helping themselves to an extra fiver or so from someone’s purse/wallet. On the higher end, we’ve come across examples of undue influence so individuals can get more inheritance  Below are some of the common examples and some of real-life war stories to show how this can happen.

War stories for financial or elder abuse

Visiting son. The son who gracefully travels home regularly to see his mother (and support his local football team). The mother provides all food for the son and often treats him to a take away, he barely spends a penny while he is home. The son, however, requests £400 for the petrol for a 200-mile round trip. His mother, likely know no better (fuel is very expensive nowadays) and/or fears abandonment, just pays.

Facebook marketplace fiend. A niece likes like help out with her uncle who has aged quite rapidly in recent years and needs more help around the house. He has had a couple bad falls in recent years, so thought nothing much when his niece started to confine him to a limited number of rooms in his home. Meanwhile, the niece has gradually been selling off the contents of the other rooms via Facebook marketplace. The uncle hasn’t seen a penny of the proceeds and is unaware of what is happening.

Beer on a champagne budget. As Dottie was high risk, during the pandemic her daughter had started to do her weekly shop for her. Dottie used to do her weekly shop in Marks & Spenders or Waitrose as she liked the customer service and had been a loyal customer for years. However, when her daughter took over she started to shop in budget shops to get her shop, buying the cheapest basic range. Dottie would always reimburse her daughter for the cost of the shopping but her daughter was overcharging her by almost double.

Double pay. Dory had started to experience problems with her memory and had become increasingly forgetful. She had a weekly cleaner who would come to her house. Dory was concerned that she’d forget to pay Dory, but she knew the cleaner was kind and if she’d forgotten to get cash out in advance that she would take her to a cash point to get the cash out. Dory would offer to pay the cleaner multiple times for the same job. Sadly, this meant that the cleaner was being paid cash when she got to the job as well as often taking her to the cash point after a job to get paid again.

Undue influence. A mother had three children and had always been open with them, explaining that she’d like to give equal amounts to all of her children. One of her children, started to experience some financial struggles and begun bullying and pressurising the mother to change her Will. Although, the mother had mental capacity she changed her Will to reflect her child’s wishes as she was concerned that they would stop seeing her and that she’d no longer be able to see her grandchildren.

Loan shark. Jonathan didn’t have much family, but he did have a couple cousins who were about 10 years younger than him. Jonathan was starting to show signs of forgetfulness but still had his mental capacity. The cousins asked Jonathan for a loan and after some convincing, he agreed to it and loaned them the money. A couple years passed and Jonathan still hadn’t been repaid and by now Jonathan had developed dementia. The cousins claimed that the loan Jonathan had given was in-fact a gift and not a loan. Jonathan was confused as he was very sure it wasn’t a gift, as that’s very uncharacteristic for him.

Safe-keeping. A father had three sons, two lived quite far away and only one of them was local. The local son helped the father out a lot, as he was close by. After his mother passed away, the son convinced his father to down size to a small house as it was just him and the son kept telling the father horror stories of elderly people’s house being broken in too. Eventually, the father agreed and sold his house for a small bungalow. This left the father with a large sum of money in his bank account from the left over equity. The son then convinced the father to put the money in his account for ‘safe-keeping’ from the ‘tax man’. The son never repaid the money to his father.

Deathbed will. Gwen’s son and her current husband (step-father to her son) had never seen eye-to-eye. Gwen and her husband were both independently wealthy, so Gwen felt there was no need to make much provision for him in her Will and instead have left everything to her son. However, this made her husband very upset as he did not like the son. When Gwen was very ill on her deathbed, her husband tricked her into signing a Will cutting her son out of his inheritance.

Granny annex. Dexter & Deidre had retired some years ago now, and were becoming increasingly aware that they might need more care soon. They were considering their options, looking into care homes and other sheltered accommodation. Their eldest son made the suggestion that they come and live with him, so that his family could take care of him. They agreed to pay for an extension which added value to property in exchange for lifetime care. As soon as the extension was complete, the level of care his family were providing stopped and his son did not keep up his end of the agreement.

Misuse of a Power of Attorney. Kevin was worried about his parents and there later life care, so he arranged for himself to become their Lasting Power of Attorney. He did a good job taking care of his parent’s affairs. He made sure they were claiming the correct benefits, paid their bills on time and made sure everything was running smoothly. When it was time for his parents to move into a carehome, he needed to sell their property to fund this. Kevin was a tradesman himself and many of his friends were. He decided to sell the property to his business partner without exploring all opportunity. This meant that the property sold undervalue for what it could have got in different circumstances and Kevin benefitted from this as his business partner shared the profits with him.

 

Who are the perpetrators? Fraud Triangle

Almost anyone can perpetrate financial abuse of the elderly, perhaps mostly shockingly this can include even the closet of family members, such as spouses, children or grandchildren, carers and those in a position of trust and responsibility.

Most people won’t commit fraud unless there is a really good reason. After all, most people are inherently good – however, people are not perfect. They can easily fall to subject to being in the wrong place at the wrong time. They need to perfect conditions to commit fraud.

Criminologist Donald R. Cressey created the fraud triangle that outlines the three conditions that lead to higher rates of fraud. ⁠We have applied this here as financial or elder abuse is an example of fraud.
⁠
Motivation + Opportunity + Rationalisation = Fraud
⁠
Individuals need to be ‘motivated’ in order to commit fraud. This might be that there is a sudden change in someone’s financial circumstances could lead to them committing fraud. They could do it out of spite if they feel wronged, particularly as family grievances can run deep. They may feel they need to in order to put food on the table or to keep up with the Robinsons (or Kardashian’s). ⁠Furthermore, they may have mismanaged their own money or business.

Once an individuals is motivated they also need the ‘opportunity’ to commit it, as without an opening nobody would be able to commit the fraud. This is how family members often have an advantage for committing financial abuse, as we mostly treat them with trust and openness. For example, some vulnerable individuals will share there pin with ‘trusted’ family members so they can go do their shopping for them.

Lastly, even when some is motivated and has the opportunity they often need one last thing to push them over – they need to be able to ‘rationalise’ their actions. Most individuals will choose not to act unless they can justify why their actions are ‘okay’. As even when everything else falls in place, they usually wouldn’t want to do it if they meant they were harming someone else.  Common rationalisations include, ‘x-family-member does it too’, ‘they have enough, this won’t be missed’, ‘it’s one of the perks’, ‘it’s my inheritance anyway’ etc.

What are the warning signs?

As with a lot of things, the biggest red flag is change. Especially, when it’s unexpected. Often by the time we’ve reached an elderly age we have reached a fairly predictable life – in terms of our spending and income patterns, the routines we have and who is helping us. Any sudden and expected changes should be treated with caution as they may indicate financial or elder abuse.

 

Obvious indicators

  • Frequent and significant withdrawals from ATMs or bank transfers between accounts that the individual cannot explain.
  • A change in the amount of cash being withdrawn each week when their spending habits haven’t changed for many years.
  • Additional names on banks accounts or benefit payments.
  • Appearance of previously uninvolved relatives or ‘close friends’.
  • An increase in the amount of cash in the house.
  • Unpaid bills.

Subtle indicators

  • Increasing reluctance to talk openly about family or friends.
  • Increasing isolation or avoidance of once-usual social contact.
  • Increasing reluctance to spend money, for example, to heat their home or to buy food.
  • Increasing timidity, nervousness or lack of self-confidence.

What should you do if you suspect financial abuse?

Always act sensitively when you have suspicion of financial or elder abuse, as not acting in this why may cause offense and cause them to withdraw from you. Broaching the topic is easiest when you have a strong relationship. There are various courses of action available, depending on this issues at hand, at Nicholls Law we are always on hand to answer your queries and point you in the right direction.

We’d always recommend that you seek legal advice, but is it important to consider the extent of the alleged abuse -is a simple one-off error or is it a pattern? If the claims of abuse are brought to you by others, check the credibility and motivations of those bringing the claims too.

For urgent help, you can contact the police, Adult Social Care, or Office of the Public Guardian (OPG).

Furthermore, there may be several steps going forward that can minimise the likelihood of financial abuse, such as apply for a Lasting Power of Attorney or a Court of Protection Deputyship order.

 

*Notice: This blog does not constitute legal advice*

References:

Age UK (2015) Financial Abuse Evidence Review. Available at: https://www.ageuk.org.uk/globalassets/age-uk/documents/reports-and-publications/reports-and-briefings/money-matters/financial_abuse_evidence_review-nov_2015.pdf

Law Society (2020) Close to home: Spotting elder abuse. Available at: https://www.lawsociety.org.uk/en/topics/blogs/close-to-home-spotting-elder-abuse

 

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Lasting Powers or Attorney: Mental capacity, next of kin and professional attorneys

Mental capacity

When researching powers of attorney, you will no doubt notice that the term “mental capacity” is thrown around a lot. Medical professionals use it. Legal professionals use it. Care providers use it. But what does this mean?

We’ve found Age UK’s resources to be the most useful resource that is readily available to explain this, here is a link to their page on mental capacity. However, we will summarise their explanation here. Essentially, mental capacity is the ability to make and communicate specific decisions when they need to be made. Within this, there are three key components that professionals need to ensure you understand: the decision you need to make, why you need to make it and the likely outcome of your decision.

It has been noted that mental capacity is not necessarily a fixed state. For example, some individuals may find that they have the mental capacity to make some decisions on some days not but on other days. Other individuals might find that they can make decisions about certain things but not others, for example being able to understand financial decisions while purchasing food and everyday goods but not be able to understand enough to make relevant decisions while purchasing infrequent things, such as home insurance.

However, it should be pointed out that needing more time to understand or communicate your decisions does not necessarily indicate a lack of mental capacity. Care should always be taken to protect everyone’s decision making abilities.

The Myth of Next of Kin

Many individuals assumed that because they are next of kin that they will automatically be able to deal with your bank accounts and pension, and make decisions about your health, if you lose mental capacity. However, this is not the case. Without an LPA, they will not have any authority to act on your behalf. Therefore, it is even more important to ensure that you have your affairs in order long before you are incapacitated, as if you lose capacity you will not be able to arrange a LPA. Instead, you would have to apply for a court of protection deputyship which takes significantly longer and can lead to delays in important decisions being made and acted.

At Nicholls Law, we specialise in Elder Client Asset and Estate Protection and LPAs are an important part of that. We offer services where we can assist you in drafting LPA documentation, or we can act on your behalf as a professional attorney.

How to choose your attorney

Your attorney is being given the ability to make life changing decisions on your behalf. Therefore, it is incredibly important that you choose the right person to act on your behalf. The OPG require attorneys to be:

  • Aged 18 years old or over
  • They must have mental capacity themselves to act as an attorney
  • For financial attorneys, the attorney must not be bankrupt

Traditionally, family members of close friends were chosen as attorneys. However, more and more people are choosing to appoint professional attorneys, such as solicitors or accountants, to act as their property and finance attorneys.

A donor can appoint anyone they like as an attorney provided they are an adult with mental capacity, and not bankrupt if appointed for a property and financial affairs LPA. Typically, family members or close friends are chosen. Some people may choose to appoint professionals (for example, solicitors or accountants) to act as their property and finance attorney.

Sometimes just one attorney is appointed, but more can be chosen. If there is more than one attorney, the donor can decide whether the attorneys must act either:

  • ‘jointly’ – which means all decisions must be made together
  • ’jointly and severally’- where some decisions have to be made together, but some can be made separately.

For example, some property and financial affairs LPAs may specify that the attorneys must act ‘jointly’ when selling property, but the attorneys can act ‘jointly and severally’ for all other transactions. Similarly, a health and welfare LPA may specify that the attorneys must work ‘jointly’ when deciding where the donor should live.

Why use a professional attorney

We all know that at times it can be incredibly complicated to make the decisions that we need to make. May of our clients decided to enlist a professional attorney instead of using a family member as they wanted to ensure that the decisions that were being made were the must appropriate for their circumstances. Professional attorneys are often able to make better decision, quicker as they are less emotionally involved. Find out more on our Powers of Attorney page.

In summary

There are three different types of power of attorney, however only LPAs can protect your future from you losing capacity. Within LPA there are two different types, financial and health. It is important to ensure you have the right person, or persons, representing you for your LPA. There are many benefits to enlisting a professional attorney which help ensure your future is in safe hands.

If you are interested in setting up a LPA for yourself or if you think a loved one would benefit, please contact us to speak to one of our expert staff to see if it is suitable for your needs.

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5 Reasons Why you Should Try Mediation Alongside Litigation

Charlotte Steinfeld who is Head of 10KBW Mediation Group from 10 King’s Bench Walk barristers chamber shares her thoughts on why you should try mediation when a dispute emerges. Charlotte is both a barrister and a mediator, so she has seen numerous matters from both sides. 

 

More and more, parties are choosing to mediate alongside taking their cases to court, and there are 5 very good reasons for doing so.

What is mediation?

Mediation is the most popular form of alternative dispute resolution (ADR) in England and Wales, largely because it can run parallel to litigation.

Parties can choose to mediate at any stage of their legal proceedings and are often strongly encouraged to do so by the judge in their particular case.  If they don’t settle, they can still proceed to court.

The parties themselves, with the trusted advice of their legal advisers, take control in mediation. They choose:

  • who the mediator will be
  • what information will be exchanged with the other side
  • what types of offers will be made and when, and
  • if they will come to a deal with the other party.

The vast majority of parties successfully settle their case at mediation, and on their own specific terms. However, even if they do not settle, parties often find the negotiations have been extremely beneficial to their court case as a whole.

Mediation works in all types of civil and commercial disputes. It is especially effective in cases where the parties have an ongoing personal or commercial relationship, for example in inheritance, contract, and neighbour disputes.

What happens at mediation?

During mediation, a series of confidential negotiation discussions take place through a skilled, independent third party: the mediator. You are usually in a different room from the person/s with whom you are in dispute.

You, alongside your lawyers, will work through your chosen mediator to:

  • request and exchange information with the other party – on the facts, law, evidence and personal and/or commercial interests underlying the dispute, and
  • engage in negotiating a settlement of the dispute on your own terms.

Your lawyer, usually a barrister known as a “mediation advocate”, will accompany you to the mediation with a robust negotiation strategy in place to help you secure what you want and need out of the negotiation.

You can choose to stay or walk away at any time. If you walk away, the litigation usually continues as it was prior to the mediation. If you settle, your lawyers can end the litigation via a consent order called a “Tomlin Order”. Ordinarily, your agreement is enforceable in court.

There are many benefits to mediating a dispute even if it does not settle at mediation. Here are 5:

  • You can obtain information about the other side’s case that you simply would not have obtained in any other way. It may be a lot weaker or a lot stronger than you and/or your lawyers had considered.
  • You can make or seek offers which include non-monetary items that a judge cannot order, such as requesting an apology or a promise that certain changes be made in future business practices. Any offers that are not accepted can be completely retracted and they will not be communicated to the judge if you proceed to court.
  • You engage in a completely confidential process, where all parties sign an agreement to this effect. You can explore the case and make offers of your choice with the full assurance that no person outside of the mediation can know what was discussed at mediation. Mediation is also without prejudice, which means what is discussed at mediation is confidential from the judge in your case if the matter continues to court.
  • Offering to mediate protects you. If you offer mediation and the other side “unreasonably refuses”, even if they later win at court, the judge can order them to pay some of your costs. Vice versa, if you unreasonably refuse to mediate, yet later win your case, the judge can order you to pay some of the other side’s costs. It therefore makes sense to try mediation; there is little to lose.
  • If you settle, not only will you have an agreement which will end the dispute in the way you want, you will also likely have saved thousands, if not tens of thousands, of pounds litigating your case in court.

There are very good reasons to try mediation for your dispute. Ask Nicholls Law more about how they can help you to mediate your case whilst protecting your position in litigation.

 

Charlotte Steinfeld

Charlotte Steinfeld is a barrister and CEDR accredited commercial mediator based at 10 King’s Bench Walk Chambers, where she is also head of the 10KBW Mediation Group. Charlotte has attended the world-renowned Harvard Law School Program on Negotiation and uses the Harvard framework of principled negotiation at mediation.

 

*Notice: This blog does not constitute legal advice*

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Trick or Treat: Solicitors Edition

Trick or treat? This half-term week we will be investigating things that strike fear into the hearts of even the bravest solicitors. Make sure you follow us on Instagram and Facebook to keep up to date!

We hope you enjoy this tongue in cheek campaign and remember – we are your local solicitors, and we can always be ready to support you when things get scary.

 

Haunted Houses

To prevent uncertainty haunting your estate after death, you should consider making a Will so you can have some control over what happens when you pass.

Dying without a Will in place leaves your estate intestate and means your estate must follow the inheritance rules set by the government. This might lead to a haunting because your estate has ended up with the wrong person!

Find out more about Wills, probate and estates.

 

Woeful Wills

You might be attracted by the idea of being able to create your own Will or being able to walk into a local corner shop to get a cheap Will, but is it really worth scrimping on a document that deals with your entire personal wealth especially when you no longer have a hand in clarifying the finer details?

We have fought hard to clear up the mess of many poorly drafted Wills, to the extent that the idea of a DIY or cheap Will fills us with woe. Thankfully, you can take positive steps today to create a Will that accurately reflects your wishes. That way, the only haunting you might do when you have passed is Casper the Friendly Ghost kind and not the Grudge inspired.

Find out more about if your Will is woeful or well-written here.

 

Frightful Fraud – Business

Fraud can happen anytime and anywhere. Businesses are particularly vulnerable to fraud and the impact of business fraud can be significant, particularly for small- or medium-sized enterprises.

Business fraud can come from anywhere, including staff members, customers, suppliers, or unknown third parties.

The reality is that you never know who is wearing a mask!

Click here to find out more about a new kind of fraud that is targeting businesses.

 

Frightful Fraud – Personal

Fraud can be frightful. When it happens in our personal lives it can cause relationship breakdown and even estrangement.

It is important to protect yourself and those vulnerable around you from fraud. Speak to us today to hear the positive steps you can make now and we can start brewing a protection potion!

Find out more about Fraud here. 

 

Lasting Paranormal Activity

A daunting thought for many is what would happen if you lost mental capacity and can no longer take care of yourself. There are legal instruments* in UK law that allow someone else to step in to take care of you should this happen, the most common being Deputyships and Lasting Powers of Attorney.

Whether you are an attorney or a deputy, you will be responsible for managing the property and financial affairs and/or the health and welfare of someone who lacks the capacity to manage these affairs for themselves – they’ll be under your protection spell!

Find out more about in our estate planning checklist.

 

Chilling Cohabitation

If two people live together but do not marry, upon their separation they could face a number of legal issues depending on their circumstances. These chilling issues can vary and can be particularly impactful if the couple has children or jointly own assets, such as property.

Unfortunately, ‘common law partners’ are a myth and means cohabiting couples have far fewer protections than married couples do – however, do not fear! There are alternatives that can help – speak to us today to find out more.

 

Talking Trick or Treat

Verbal contracts may be spellbinding and often as legally binding as written ones, however, they can be gruesome to prove in a court of law. A verbal contract is more likely to lead to confusion over what the parties are agreeing to.

Solicitors may seem superstitious, however, negotiating a written contract is definitely a treat as verbal contracts can be tricky!

We hope you enjoyed this article – what do you think – trick or treat?

* legal instrument is a written legal document that records the formal execution of legally enforceable acts or agreements and secures their associated legal rights, obligations, and duties.

 

*Notice: This blog does not constitute legal advice*

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#FreeBritney: What are Conservatorships? Does the UK have Conservatorship’s too?

What are conservatorships? Does the UK have them too? A short answer: yes. Yes, we do. However, they are called deputyships and there are some slight differences that will be explained in this blog. This blog will also explore the role of a deputy and investigate alternatives.

 

What is a conservatorship?

In American law, a conservatorship describes a legal guardianship arrangement where a court-appointed guardian manages the financial affairs or daily life of an individual due to their physical or mental limitations or old age.

In Britney’s case, following hospitalisation in a psychiatric ward in 2008, the singer was put under temporary conservatorship with her father, Jamie Spears, acting as co-conservator alongside attorney Andrew M Wallet. The temporary conservatorship was then extended, and extended again, and was eventually made permanent in October 2008 which gave Jamie indefinite control over his daughter’s estate, which was estimated to be valued at around $59m at the time.

 

Are there UK parallels?

As aforementioned, we have similar structures in the UK too. You may have heard about Lasting Powers of Attorney or a Court of Protection Deputyship Order, sometimes known as a COP or a deputyship. The most similar arrangement is a deputyship. In order to obtain a deputyship on someone else’s behalf, a deputy would need to apply to the Court of Protection.

 

Who are the Court of Protection?

The Court of Protection is the body within the courts’ system who,

“Makes decisions on financial or welfare matters for people who can’t make decisions at the time they need to be made (they ‘lack mental capacity’).”

Deputyships are only available when someone lacks mental capacity. For instance, someone with an illness affecting brain function, learning difficulties, or who has experienced a severe brain injury. Dementia and Alzheimer’s are common reasons for deputyship applications.

An application for a UK deputyship is far more restricted than for a US conservatorship; when deciding to grant the application, the court must adhere to stringent rules under the Mental Capacity Act (2005):

  1. Every adult must be assumed to have capacity unless proved otherwise;
  2. An adult must be offered all possible help before they are considered unfit to make decisions;
  3. A person has the right to make unwise decisions and should not lose this right;
  4. Any decisions made under this act must be done in the individual’s best interest;
  5. Anything done for the person should be the least restrictive of their basic rights and freedoms.

Leading with these principles, the legal system attempts to reduce the potential for abuse of the most vulnerable in society.

 

What do deputies do?

In the UK, there are property and financial affairs deputies and also personal welfare deputies. Essentially, welfare deputies are appointed to make decisions relating to health care, such as hospital treatment and deciding whether or not to place someone into care, while financial deputies are appointed to make decisions relating to money, including selling and acquiring new assets.

 

What are the differences between deputyships and conservatorships?

While deputies in the UK can be close friends or family, typically, financial deputies for larger estates are professionals who are appointed for their background and experience in managing financial matters. Therefore, if Britney Spears was under a deputyship in the UK, it is likely that an experienced financial professional would have been appointed to manage her estate, as opposed to her inexperienced father, particularly when considering the value of the estate.

Aside from the desired background, a deputy should have, there is a system of checks and balances to ensure deputies cannot abuse their powers. They must send an annual report to the Office of the Public Guardian (OPG) to explain the decisions they have made in relation to their duties throughout the year. Deputies can also be reimbursed for legitimate and reasonable expenses such as travel, but anything exceeding £500 must be accounted for and explained. If an expense is found to be unreasonable, it must be repaid to the OPG and may result in the removal of the deputy. The money exchanged with the guardians is probably the most significant difference between the UK deputyship and the US conservatorship. UK deputies are not entitled to remuneration unless authorised by the OPG, while US conservators are entitled to charge a percentage of the individual’s assets; for example, Britney’s conservators took a percentage of her income in addition to a salary, taking remuneration similarly to how a director-shareholder of a business would.

 

So what are Powers of Attorney?

If you haven’t come across a deputyship, you may have at least heard of Powers of Attorney, which you might have thought sounds quite similar to a deputyship and, by extension, a conservatorship. A Power of Attorney can either be a lasting power (LPA) or an enduring power, but it is no longer possible to set up an enduring power of attorney.

Whether you are an attorney, conservator, or deputy, you will be responsible for managing the property and financial affairs or the health and welfare of someone who lacks the capacity to manage these affairs for themselves, however, there are a few differences to consider.

  Power of Attorney Deputyship
Capacity The LPA is set up by the individual, whose affairs the attorney is responsible for when they still have capacity; It is a precaution taken should they lose capacity in future. As above the court grants a deputy their powers when it is decided the individual does not possess the mental capacity to manage their own affairs.
Process Anyone over the age of 18 can be appointed as an attorney and can be registered between 8 and 12 weeks. A court must decide whether a deputy is suitable for the role, according to the nature of the estate. Applications can take up to 6 months (for reference, Britney’s 2008 temporary conservatorship was allegedly arranged in 10 minutes).
Due diligence/safeguards There is no need to report an attorney’s actions each year, moreover, there is no obligation to take out insurance as an attorney. However, you have control over who becomes the attorney, hence it is possible to appoint an insured professional such as a solicitor which can provide another layer of protection. Deputies have an obligation to file an annual report with the OPG. Moreover, a deputy must take out a security bond each year to insure against mismanagement.

 

Why create an LPA?

Creating an LPA can be a good precaution for anyone to take – it means that you can have complete control in deciding who would take over your affairs should the worst happen and you find yourself lacking capacity following unexpected, life-changing accidents or developments in later life.

LPAs can cover your welfare and financial affairs in multiple ways including your business affairs. For instance, say a businessperson who acts as the chairperson in a company suffers a stroke and no longer has the capacity to make decisions in the business, if they had an LPA in place that deals with who acts on their behalf should this occur, their business would be able to continue functioning with the attorney acting in their stead. Whereas, if no LPA had been executed, a deputyship order would have to be sought which can be expensive and time-consuming, resulting in difficulty, both for the business, for the businessperson, and for their deputy.

At Nicholls Law, we have in-depth experience advising on LPAs & COP and the appointment of attorneys & deputy’s, as well as acting as attorney or deputy for individuals who have executed an LPA. We can help those who want to ensure their affairs are kept in order when life develops in unexpected ways through the implementation of both personal and business LPAs.

 

Sources

Framing Britney Spears – Conservatorship – Blanchards Law

https://www.pedestrian.tv/entertainment/britney-spears-net-worth/

https://www.law.ac.uk/about/press-releases/free-britney-conservatorship/

*Notice: This blog does not constitute legal advice*

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Social Care Reforms 2021: What is happening?

Last week plans that originally appeared in Johnson’s first speech as Prime Minister in 2019 to reform the health and social care sector have materialised in the social care reforms 2021.

Last Tuesday, 7th September 2021, the Prime Minister announced plans to raise investment for the health and care system over the next three years by way of tax changes. The main aim of this plan is to allow the NHS to recover from COVID-related backlogs as well as preventing people in the care system having to sell their assets to cover the cost of social care.

Currently, if a person has savings and assets worth more than £23,250, inclusive of any land owned, they will receive no subsidy from the government and will have to cover all care expenses including care home costs with no cap; the effect of this for many is that they are forced to sell their homes to cover the rising costs of care homes.

Under the new plan, the aim is to prevent this from happening. From April 2022, those with savings and assets from £20,000 to £100,000 will have to contribute to care costs, but not more than 20% of their assets each year. Those with assets worth above £100,000 will have to meet all costs until their assets fall to below £100,000 and there will be a lifetime cap at £86,000, which ministers estimate equates to around three years’ worth of full-time care.

Essex Lawyers Court of Protection Deputyship and Appointee

What does this mean?

The plan is to raise £36bn for three years of investment, around £12bn a year. This will come from tax changes known as the Health and Social Care Levy starting from April 2022, including a 1.25 percentage-point increase in National Insurance, as well as a rise of 1.25 percentage-point increase in rates of dividend taxation to limit gains for owner-managers of companies.

What will this be spent on?

  • £16bn direct NHS funding in England
  • £8.9bn for health-based COVID response in England
  • £5.4bn for social care in England – of which £500,000 is on training
  • £5.7bn for devolved nations (mix of health and social care)

What is the material effect?

The material effect of this levy for many is that National Insurance will go up and working pensioners will also have to pay National Insurance contributions.

People with care needs will need to approach their Local Authority to request a needs assessment, which will determine how much social care is necessary and what will be funded if they have no resources.

As aforementioned, there will be an £86,000 cap, but this will not include hotel costs, food, or accommodation, which will need to be self-funded.

What does this mean politically?

This announcement comes as a controversial decision politically. The reform is partly funded by an increase in National Insurance. This comes as a contradiction to the Conservatives’ guarantee that there would be no change to the rate of Income Tax, VAT, or National Insurance in their 2019 general election manifesto.

The U-turn threatens the red wall seats won for the Conservatives in 2019 and many are nervous about losing the trust of new voters.

This has stoked the fire for unrest across Parliament with criticisms from within the Conservative party, as well as opposition MPs.

 

What’s next?

Despite backlash across Parliament, the plans were set to go ahead subject to a vote on the social care reforms 2021 in the Commons on Wednesday 8th September 2021. MPs have backed the health and social care levy, voting 319 to 248.

This change is still relatively new however and the finest details are still to come; the government has said they will announce further information in the coming weeks to clarify these finer points.

 

Check out some of our related content on Estate Planning Checklist, Trusts and Wills.

 

Sources

  1. Government press release, “Blueprint launched for NHS and social care reform following pandemic” (https://www.gov.uk/government/news/blueprint-launched-for-nhs-and-social-care-reform-following-pandemic)
  2. Government press release, “Record £36 billion investment to reform NHS and Social Care” (https://www.gov.uk/government/news/record-36-billion-investment-to-reform-nhs-and-social-care)
  3. BBC news article, “Boris Johnson outlines new 1.25% health and social care tax to pay for reforms” (https://www.bbc.co.uk/news/uk-politics-58476632)
  4. FT article, “How will reform of social care in England work?” (https://www.ft.com/content/11e7bf23-1dc5-4dc6-8135-3079f558ce98)
  5. The King’s Fund article, “Fixing social care is not all about a cap on costs” (https://www.kingsfund.org.uk/blog/2021/09/social-care-cap-on-costs)
  6. Guardian article, “What has Boris Johnson announced in his social care plan?” (https://www.theguardian.com/society/2021/sep/07/what-has-boris-johnson-announced-social-care-plan)

*Notice: This blog does not constitute legal advice*

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Bogus Bosses and Working from Home: The increase of email fraud that is leaving many UK businesses paying the price

Fraud

How many emails do you receive a day? For most people, it is a lot. Building upon this, how often do these emails contain a request that is urgent and time-sensitive? Again, for most people, this will be very common. Business is naturally time crucial, wanting to settle matters as quickly as possible is second nature, it is expected.

Importantly, although urgency can aid a business’ ability to thrive, it can also be a major flaw. It can lead to oversight of the suspicious activity.

In the world of business, and no doubt many individuals’ personal lives too, this type of oversight has often led to funds mistakenly being transferred into fraudulent accounts. 

In cases where fraudsters act as ‘bogus bosses’ sending out emails requesting funds, staff blindly following orders can lead to serious losses. Many employees will have their guard down when they receive an urgent email from a boss.

According to an article from the INFOSEC, this type of “CEO fraud” is costing businesses across the globe millions (if not billions) a year. Several other articles have also reported the impact of bogus boss fraud emails, including BBC, The Geek Guys and RBS. 

For example, the accounts department receives an email from a board member requesting payment of funds, perhaps to settle a court case or to enable an important deal. This in itself is not out of place, and it would not be uncommon for such emails to inspire urgency.

However, although the email seems genuine, that may not be the case. A criminal after doing some reconnaissance into the company’s high-level staff and those who are in control of payments may successfully spoof a request to defer funds into their own fraudulent accounts. This reconnaissance leads to greater ‘success’ for the fraudster but, more worryingly, a greater impact on the business’s financial health.

Using the guise of a ‘bogus boss’ uniquely increases the likelihood for many honest and hard-working employees to redirect payments to a fraudster. A way to mitigate the risk here is to ensure that your staff are provided with regular and quality training, fraudsters are constantly improving their craft and it will take diligence to stay ahead of them. It is also worth creating strict policies and procedures for when payment details are sent and received, a simple technique could be to require that any account details and any changes to them are verified through two forms of media, i.e. via email and a telephone call. Please use the contact form to reach out to us if you would like more information on training or policies and procedures to best protect your business. 

Furthermore, with a sudden and drastic increase in the number of individuals now working from home due to the impact of Covid,  Nicholls Law cannot help but wonder what impact these types of ‘bogus boss’ emails will have on businesses going forward? Staff newly working from home, eager to show they are working hard, might be fooled more easily than they would have been while working in an office environment. 

Moreover, this interesting article by Financial Times reiterates those fears, as they reported a sharp rise in attempted scams in the weeks at the start of the first lockdown. 

If your business or you personally have been affected by ‘bogus boss fraud emails’ or other types of fraud, please contact us for a FREE initial consultation. 

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Nicholls Law vs Norden’s Chartered Accountants: Football Friendly

Last week, Nicholls Law got together with Norden’s Chartered Accountants for a friendly football match. Here is the low down from the Nicholls Law vs Norden’s Chartered Accountants.

Nicholls Law managed to take the lead at the start of the game, however, Norden’s were able to fight back strong in the middle and made a serious challenge against the Nicholls Law team. Nicholls Law managed a couple of last-minute goals which secured them the win.

Overall, both sides would agree that it was a tough game and they are looking forward to the rematch.

Our Principal Solicitor, Paul Nicholls (far right), lead the team shouting encouragement and giving direction to his team throughout but whilst playing in goal and on the pitch.

Nicholls Law team photo

Norden’s team was lead by Zac Cannon (third on the left) who played in goal, who was coached his team well and made some excellent saves at the same time.

Norden's team photo

 

The game was held at Powerleague Fairlops which was Norden’s chosen home ground and a rematch has been agreed for Nicholls Law’s home ground in the Southend area for June. Keep your eye peeled for an update on when and where the rematch will be held.

Luckily, we were able to have the wonderful photographer,  Alex Atherton, on hand to get a couple of actions shots during the game. Alex did an incredible job getting some amazing photos while facing problems with awkward lighting and also having to shot through a metal fence. I think you will agree these are some beautiful shots! Check out some of the photos below.

Nicholls Law vs Norden’s Chartered Accountants. Nicholls Law’s team are in the yellow bibs and Norden’s team are playing without bibs.

At Nicholls Law, we quite a sporty team and love taking part in events like this, such as FRP’s Nuclear Mud Race for Haven’s Hospice. We find that doing events like this helps us come together as a stronger team and always helps us build stronger relationships with other key businesses.

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Dementia Action Week 2021: How can you help?

Today, 17th May 2021 marks the start of Alzheimer’s Society Dementia Action Week. This is a national event in the UK that seeks to draw attention to the lives of people affected by dementia, as dementia not only affects the individual with dementia but also their loved ones around them. See the powerful video below that Alzheimer’s Society has created which clearly shows the impact of dementia on loved ones.

 

Dementia Action Week, from the 17th to the 23rd May 2021, is a national event that sees the UK public taking action to improve the lives of people affected by dementia. Find out below some ways that you can get involved.

Be a friend

People with dementia, and those living with someone with dementia, have been hit incredibly hard by the Covid-19 pandemic. However, we can all play a role in supporting those in local communities who are living with dementia as well as their careers. Reaching out and being a friend to someone who has been affected by dementia this week would be an excellent way to get involved in Dementia Action Week.

Raise your awareness

Those battling with dementia on a daily basis, and those supporting loved ones with dementia, can often feel isolated as not many individuals truly understand what they are going through. Spend some time this week to develop your understanding, and pass this on to friends too. Thankfully, as it is dementia action week there are a lot of resources readily available. However, we’d recommend checking out Alzheimer’s Society and Dementia Concern as well as checking out the #curethecaresystem and #dementiaactionweek hashtags on social media.

Donate

If you are in a position to do so, you could consider donating to a local charity that supports those affected by dementia in your community. Many of these charities work hard to support people living with dementia and their carers so they can live as independently as possible.

‘Cure the Care System’ campaign

Alzheimer’s Society are running a petition calling on the government to Cure the Care System. Find out more by clicking on the button below:

CURE THE CARE SYSTEM PETITION

Dementia action week banner

Importantly, developing dementia can impact your legal ability to make your own decisions. If you are concerned about developing dementia and the legal implications please reach out and we can help. Alternatively, please check out our related blogs on Lasting Powers of Attorneys and Court of Protection.

 

*This blog does not constitute legal advice.

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This or That: Solicitors Edition

The ‘This or That’ trend seems to be taking off on social media. We thought we’d jump on the bandwagon and give some insight into the decisions that solicitors and other legal professionals will make daily, which often help them avoid trouble later down the line.

Litigation work is our firm’s ‘bread and butter’. Sadly, much of litigation work tends to be reactive instead of proactive. However, working on the opposite side of things has given us key insights into how to avoid problems before they arise. We have written this blog in the hope we can impart some wisdom to help you proactively avoid problems.

Abbreviated this or that graphic

LPA or COP

An LPA is a Lasting Power of Attorney and a COP is a Court of Protection order (Deputyship Order). In practice, these aren’t that different. What does make them different though is speed and efficiency. An LPA is something that you put in place before you lose capacity and allows others to legally make decisions on your behalf. The transition here is smooth and means you are always protected. Not having one in place, means that when you lose capacity (temporarily or permanently) you, your family, and your loved ones lose the ability to make decisions on your behalf. The decisions then fall into the hands of the local council and courts. You can apply for a Deputyship Order to allow your loved ones to make these decisions for you, however, there is approximately a 9-month delay between making an application and the courts granting an order. This means 9-months with strangers making your health and care decisions, including medical and care home placement decisions. And nobody able to progress financial decisions such as accessing your bank account, or selling your property to fund care home fees.

Therefore, the wise choice is to get an LPA in place early, well before the time you will need it, to ensure you are protected later in life.

Cash or Trusts

Put not your trust in money but put your money in trust” – Oliver Wendell Holmes US physician and author 

Money, and other assets, are susceptible to a myriad of threats and risks. Trusts can be an excellent way to mitigate that risk. For example, you may wish to bequeath an asset to a young member of your family but are worried that they may “blow” their inheritance but you want to give them it as an investment. Putting this asset in a trust would enable you to have some control over how that asset is used. Trusts can also help protect assets from claims made by partners in divorce proceedings or financial institutions in bankruptcy proceedings.

Trusts are very powerful and can help in a variety of ways, however, they are very complex, and therefore expert, personalised advice is needed. There has to be a legitimate reason for setting up a trust. A trust set up with the main purpose being to hide assets from creditors, spouses and to avoid paying care home fees for example are liable to be set aside under the law. Help is at hand. We can help guide you through the maze in this complex area. Message us today to arrange a call back from one of our Elder Client Estate and Asset Protection team members.

Litigation or ADR

Alternative Dispute Resolution (ADR) is usually the better option than litigation as it can save time and money. Litigation can be very costly and, due to court timetables and official procedures, litigation is very time-consuming. This can result in years of legal battles, expenses and avoidable stress. Furthermore, litigation has far less control over the outcomes than ADR. In ADR all parties are able to decide for themselves how they would like to settle, whereas in litigation the decision is left to the judge on the day which is likely to have an outcome which at least one party won’t like. Moreover, when matters go to trial they are no longer confidential which means anyone can find out about your business.

It’s important to note that ADR does not always work out, as sometimes parties just cannot see eye-to-eye. Therefore, a third party (the judge) needs to make the decision for them. However, it is important to attempt ADR before starting litigation.

Will or Intestacy

Throughout the year, you make many decisions for how you spend your money and who you gift it to; whether that’s Christmas presents, Easter Eggs, or supporting charities. You like to choose who you’re giving things to and how much. So, why not do the same when you pass away? As, broadly speaking, this is what you are doing with a Will anyways. Importantly, this gives you control over your wishes after you are gone. Furthermore, the Intestacy Rules are very limited and do not suit modern life, which could lead to some of your loved ones missing out. Importantly, dying without a Will in place costs estates around £9,700 in lost assets only, not including fees, inheritance tax or ‘heir hunters’ and also could make probating the estate far more complicated.

Therefore, the clear choice for a lawyer is to proactively take control and make a Will, instead of leaving it up to someone else to decide where your assets go.

Bespoke or Generic

With the wonders of the modern internet, it takes just seconds to have a variety of generic, DIY legal documents fall on your lap with one simple search. And although a solicitor will always encourage you to have something in place instead of nothing, we’d also always encourage you to have a bespoke document drafted by professionals. Whether that’s a rental agreement, building contracts tenancy, Will, loan document, employment contract, privacy agreement, and so on. It’s important to get a bespoke document that actually reflects your true needs. Importantly, using online templates can impact the legitimacy of your document and could lead you to awkward or costly situations that could have been avoided.

Bespoke advice is always key and will always be what lawyers are drawn to. Importantly, at Nicholls Law, we appreciate that budget can be an impacting factor for why individuals may choose generic or DIY documents over professionally drafted ones. Therefore, we offer the ‘Goldie Locks’ style service with three levels, Papa Bear service where we do everything for you, Mama Bear where we work together, or Baby Bear where you do most of the work but seek our advice on specific queries. Speak to us today to find out more. 

Contract or Handshakes

Chivalry is dead – although we like to believe that handshakes are a signifier of trust and mutual understanding as well as an indicator of future behaviour, sadly, that is not always the case. Believe us, we have seen enough cases where something was shaken upon but then lead to later conflict. Having a contract in place is important, as this a formal record of what was agreed, that works both as a reminder and a measurement tool to ensure both parties are acting in an agreed manner.

Handshakes are a great place to start agreements, however, they should always be finished with a formal contract which is what a lawyer will always choose.

Verbal or Written

Building upon the previous point, you always want to ensure you get as much as possible in written communication. This will give you a paper trail of physical evidence, which – if needed – you could use at a later point in court. With verbal evidence, it is much harder to prove what was said and agreed. Furthermore, verbal agreements can easily be clouded with differences in understanding or forgetting certain details, unless they have been appropriately recorded. They also give much more opportunity for someone to change their mind or manipulate parts of the agreement.

Therefore, it is always recommended to get a confirmation in writing for anything agreed upon.

Password123 or Multi-Factor Authentication

Password123 is one of the most common passwords used today. Other popular passwords include; qwerty, password, 123456, picture1, abc123, iloveyou, letmein and princess. For a hacker, it would take them mere milliseconds to crack your password and gain access to your account. This puts you at risk. Aside from creating strong passwords that are unique for all your logins, multi-factor authentication is an excellent method to provide an extra layer of security. As they would not only need to crack your password but also access your authenticator/s, such as phone, app or email. In most cases, it is quick and easy to set up and the upside of the added security far outweighs the inconvenience some may feel this causes.

When deciding passwords and security remember that you are trying to make it difficult for a computer – not humans. Computer security is a priority to lawyers and should be a priority to you too.

 

We hope you enjoyed this blog and it gives insight into the types of choices that lawyers make and, hopefully, will enable you to avoid problems in the future. If you would like to contact us to talk through any of these points, please do. We look forward to hearing from you.

*Notice: This blog does not constitute legal advice*