Protection from Financial Mismanagement

Background:
Mr. Raj, a 60-year-old widower, was diagnosed with Alzheimer’s disease. As his condition progressed, he began to rely informally on his eldest son to help manage his finances. Unfortunately, without a formal legal arrangement like a Lasting Power of Attorney (LPA), his financial affairs were left vulnerable.

Outcome Without an LPA:
In the absence of an LPA, Mr. Raj’s eldest son mismanaged his father’s savings by investing in high-risk ventures that ultimately depleted a large portion of his funds. When Mr. Raj’s younger son discovered what was happening, it was too late to intervene. To gain the legal authority to manage his father’s finances, the younger son had to go through the court process to be appointed as a deputy. This lengthy delay resulted in further financial losses, leaving the family in a dire situation with little hope of recovering the funds.

Learning Point:
This case highlights the risks of relying solely on informal arrangements when managing the affairs of an incapacitated person. Had Mr. Raj created an LPA, he could have appointed a trustworthy family member or a third party to handle his finances, ensuring his assets were managed responsibly. An LPA would have legally empowered his chosen representative to make financial decisions in his best interest, protecting his savings and securing his care.