Lasting Powers of Attorney and Jointly Owned Property
We always advise clients to put a Lasting Power of Attorney (LPA) in place whilst they still have the mental capacity to do so. And, if figures released by the Office of the Public Guardian (OPG) are anything to go by, people throughout the UK are convinced of the benefits. Over 800,000 LPAs were registered during 2019, and an average of 20,000 per month in the first couple of months of 2020.
However, the situation for those couples who jointly own their property isn’t always straightforward.
Jointly Owned Properties – Pitfalls
Most couples own their property together. However, if one partner loses mental capacity and the jointly owned property has to be sold, in the context of an LPA, the situation can sometimes be complex. For example:
John and Anna Baxter are married and jointly own their property. Both have LPAs in place. John and Anna are each other’s attorney with no co-attorney or replacement/backup named. Unfortunately, after a serious accident, John loses mental capacity and as a result, will need round the clock care. The decision is made that the family home will be sold to fund his care, but Anna is John’s only Attorney under the LPA.
Under the Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian Regulations 2007, all properties jointly owned are held on trust for both owners. This means that there is a legal requirement for the sale of any property held on trust, that the property must be sold by two Trustees.
John is not fit to make the decision, and, as the only remaining owner and Attorney, whilst Anna can make decisions on John’s behalf, she can’t legally sign the transfer.
Practically speaking, the solution would be to draw up another LPA. However, in this scenario, John is no longer in a position to do this.
Jointly Owned Properties – Solutions
This situation is resolved by appointing another trustee. The regulations governing that govern this are found in the Trustee Delegation Act 1999.
Under a ‘deed of appointment’, the additional trustee – a trusted friend or family member – is granted the power to make a decision on John’s behalf, regarding the property sale or transfer.
Naturally, it’s best to avoid this complication happening in the first place. So, as ever, plan ahead. The simplest solution is for each joint owner to appoint:
- Different attorneys, or
- Two attorneys with the power to act jointly and severally.
In either case, this would mean that two different trustees would be available to sign the transfer to sell the property. No unnecessary delay, inconvenience or cost.
Take time and care in your choice of additional Attorney/Trustee. Make sure the person you choose knows what’s involved and is happy with the responsibility. If you’re not comfortable with appointing a friend or family member, consider appointing a professional Attorney, such as a lawyer or accountant. Whilst a professional Attorney will usually charge for their time, they will have years of relevant experience of such matters and will understand what’s required.
In the meantime, f you need further advice or guidance, please contact us. We’re here to help.
Please note that all views, comments or opinions expressed are for information only and do not constitute and should not be interpreted as being comprehensive or as giving legal advice. No one should seek to rely or act upon, or refrain from acting upon, the views, comments or opinions expressed herein without first obtaining specialist, professional or independent advice. While every effort has been made to ensure accuracy, Curtis Parkinson cannot be held liable for any errors, omissions or inaccuracies.