Family Misuse of LPAs for Financial Gain

Katie de Swarte

Contested Probate: when family members misuse LPAs for financial gain

Executors and trustees have important legal and fiduciary duties towards the estate and the beneficiaries. Where a fiduciary breaches their duties, they may be personally liable to compensate the estate for any losses caused to the estate.

Attorneys under a Lasting Power of Attorney (LPA) also owe strict fiduciary duties, for example not to misuse their power under the LPA for their own gain.

In this high value estate dispute, the deceased’s attorneys had made significant unauthorised transactions from her bank account during her final years. They were ordered to repay at least £2.6m to the estate.

Fiduciary duty

As fiduciaries, executors and attorneys must be loyal and act in the best interests of the other parties (e.g. the beneficiaries, creditors or donor of the power). This means they must not abuse their position to their own financial advantage.

Attorneys under an LPA must not, therefore, allow a situation to arise in which their personal interests conflict with their legal duties. In this case, the breaches and resulting shortfall were significant.

What’s the background?

In MacDougall v Thomas [2026] EWHC 1142, Jeanne MacDougall was a wealthy widow who died in April 2020 at the age of 91. She had suffered from Alzheimer’s for several years.

Under her final Will, made in March 2011, Jeanne left most of her significant savings and four properties to her daughter and son-in-law, Sandra and Philip. However, under a previous Will from November 2008, the estate was split broadly two ways equally between Sandra and Philip; and Gary and his family

In January 2012, Jeanne appointed Sandra and Philip as her attorneys under an LPA. Once an LPA is registered, a relationship of trust and confidence arises.

After Jeanne’s death, Gary challenged various substantial gifts and transactions carried out between 2005 and 2020 – either by Jeanne herself, or by Sandra and/or Philip using the LPA. (He also challenged Jeanne’s final Will on grounds of lack of testamentary capacity and want of knowledge and approval, but this failed).

Sandra and her husband made several admissions at trial, including:

• Exceeding their authority under the LPA over the period from 2012 to 2020;
• Breaching their duties towards Jeanne by taking Jeanne’s money for their own use and benefit;
• One of the gifts in question was “merely an advance on Sandra’s inheritance”.

The properties

The judge found that Philip had exercised a high level of control over Jeanne’s financial and property affairs, particularly from 2005. As her dementia developed, she became increasingly vulnerable. Also, Philip and Sandra failed to distinguish Jeanne’s interests from their own – particularly from 2007 when she moved in with them.

The court found clear evidence of undue influence over Jeanne in respect of three out of the five property transactions challenged. One of the property transfers was to be rescinded; and another was held voidable.

A further transaction concerned the grant of a long lease of a flat to Sandra and Philip’s eldest child, Laura, using the LPA. The transaction was knowingly at an undervalue in breach of the LPA. The lease was subsequently sold on after Jeanne died. The judge ruled that an underpayment (yet to be determined) must be repaid to the estate.

The bank transactions

The court heard evidence of “a clear cycle of emptying Jeanne’s bank accounts, realising an asset to generate more cash” and repeating the same process. This led to a depletion of at least £1m of Jeanne’s assets.

Unsurprisingly, the court did find that Sandra and Philip had also unduly influenced Jeanne into transferring various large sums from her accounts. The unauthorised bank transactions were in breach of the LPA and of their fiduciary duties to Jeanne.

The judge declared these to be void, but as those transactions could not simply be set aside, the appropriate remedy was for Sandra and Philip to compensate the estate for the value of the misused amounts. An account would therefore be taken of the bank transactions and the misuse of the bank accounts to calculate the amount due.

The compensation will be included within the residuary estate – to be divided equally between Gary and Sandra.  Sandra and Philip were ordered to repay around £2.6m to the estate – with a further amount to follow.

What does this mean?

This was a sad and complex family dispute that highlights the need for any individual acting as an attorney under an LPA and/or an executor to understand and comply with their legal and financial duties.

Suspicions are quickly raised where one child is treated more favourably than the other, and these types of Will challenges are increasingly common – particularly where dementia is an issue. It is vital to take prompt legal advice from specialist contentious probate solicitors.

Get in touch

If you are concerned that an attorney, executor or trustee has misused their position or mismanaged assets, our specialist contentious probate solicitors can help. At Osbornes Law, we have extensive experience in complex inheritance disputes, Lasting Power of Attorney disputes and claims involving breaches of fiduciary duty. Please get in touch by:

• Filling in our online enquiry form; or
• Calling us on 020 7485 8811