Court Approves Family Cost Control - Hubbard Pegman Whitney

It is common for people to appoint a family member as their attorney to manage their affairs for them should they become unable to do so.

However, unless there is a specific ‘charging clause’ in the document appointing the attorney, they cannot charge for their time. Often, this will not cause any problems, but in some cases a family member appointed as attorney may face the awful choice of giving up their livelihood to care for a relative who is no longer able to care for themselves, or buying in care at a price that will exhaust the resources of the infirm person.

Recently, the court had to deal with just such a case. A couple had each appointed their three children under an enduring power of attorney (EPA), which is a form of power of attorney which has now been superseded by lasting powers of attorney.

They then revoked the power with regard to one of their daughters, who had health issues.

The couple both developed Alzheimer’s disease and, in 2009, the attorneys went to court to register the EPAs so that they could deal fully with their parents’ affairs.

The attorneys paid a monthly allowance of £150 to each of the three children from their parents’ income of about £29,000 a year. The sums were claimed to be on account of covering travel expenses so that they could all visit their parents. In addition, transfers were made into a deposit account in each of the attorneys’ names. These were in the sum of £6,000 per year and were to be held as a reserve for care fees.

Following a family dispute, the Office of the Public Guardian was informed that the attorneys were ‘helping themselves to their parents’ assets’ and an investigation ensued. The father has since died.

The conclusion of the investigation was a court hearing in which the judge ruled that:

‘(a) the services they provided were reasonably required to meet their parents’ care needs, as are the services they continue to provide for their mother;

(b) the payments are currently affordable and sustainable;

(d) in the absence of any express provision made by the donors in their EPAs for the attorneys to be remunerated for acting as attorneys and to be rewarded for providing care support services, these payments strike a reasonable balance between ensuring that the attorneys are not financially disadvantaged by acting as their parents’ attorneys, but that they are not actually making a profit from their position.’