As of last week, you can now purchase security bonds to safeguard you if you have a lasting power of attorney (LPA). These bonds have been created to make sure people have financial protection if they have appointed someone else to look after their financial affairs if they lose capacity. Bonds have been compulsory to protect finances when someone is acting as a deputy through the Court of Protection for many years, but these are the first bonds available in relation to lasting power of attorneys.
These bonds aim to take the risk away from someone abusing their power as an attorney and protect people against any financial risk. These bonds allow people who have an lasting power of attorney to have peace of mind should something happen. This may be from an attorney not acting in your best interests and abusing their power, or from a simple, honest mistake.
With an increase in financial abuse cases reported to the Office of the Public Guardian, these types of bonds may be a good option for people who are concerned about protecting their financial assets. They can also give peace of mind to other family members and friends who have not been appointed as attorneys, knowing that your finances are safe.
The bonds come in a variety of prices, based on the amount of financial cover you may need to protect your assets.
Why would I need a bond?
In simple terms, if your attorney makes a decision which compromises your financial situation, a bond can protect you from any loss. Although you may have every faith in your attorney making the best decisions for you and trust them completely, mistakes can and do still happen.
You can also decide on the amount of cover you wish to put in place, to suit your financial circumstances. This can also be increased at a later date if you decide to increase the cover.
When should I buy a bond?
Bonds can be purchased immediately before an lasting power of attorney is registred with the Office of the Public Guardian. This will mean that the bond will cover any risks as soon as the lasting power of attorney becomes effective and give you peace of mind right from the beginning. You can also purchase a bond at a later date after the lasting power of attorney has been registered, as well as for exisiting lasting power of attorneys.
Can I cancel the bond?
As with any purchases, there is a 14 day cooling off period where you will be able to cancel a bond. After this time, the bond can still be cancelled, but the premium paid will not be refunded, as the bond will continue to cover you for another two years in the light that a claim is discovered at a later date.
Our solicitors will be able to advise you on making a lasting power of attorney, as well as the best way of helping you to protect your interests. If you’d like to find out more about lasting power of attorneys, or about protecting an existing or new lasting power of attorney, speak to our expert solicitors today.