Lasting Power of Attorney and jointly owned property
It is common for couples each to wish to appoint their partner as their sole attorney under a Lasting Power of Attorney (LPA) for property and financial affairs.
Passing control about where you live to your children or someone other than your life partner might feel uncomfortable. So, although it’s obviously a very sensible move to put your LPAs in place when you have the necessary mental capacity to do so, your choice of attorneys is important. Appointing just one attorney can lead to an extra step in the house buying and selling process if your partner loses capacity so it is worth considering other options.
Why is having only one attorney relevant?
When a jointly owned property is to be sold, two signatures are required.
An attorney appointed under a Lasting Power of Attorney cannot sign both for themself as one of the co-owners and also for their partner, husband or wife who has lost capacity in their role as attorney. Some equity release arrangements also require two individuals’ signatures.
How is this resolved?
There is a work around using the Trustee Delegation Act 1999. The law allows the co-owning attorney with capacity to appoint a co-trustee to act with them solely for dealing with the property transfer. Once the property is held by two capable trustees it can be sold, as good receipt can be given. The co-trustee can renounce their appointment and step down after the transaction.
Forward planning
To avoid your partner having to appoint a co-trustee each owner of a joint property can either appoint an attorney who is not a co-owner, or two attorneys with the power to act jointly and severally, for example, your spouse and another person. This means there would be two different individuals available to sign the transfer deed and sell the property.
If you do not want a second attorney to be involved in your finances if you lose capacity you can restrict their role - but bear in mind that this could create confusion regarding the scope of the attorneys’ powers, and the Office of the Public Guardian is likely to reject the LPA.
It is possible to make more than one Lasting Power of Attorney to deal with different assets or to appoint different attorneys. Business owners often choose to have one LPA for their business affairs and a separate financial LPA for their personal affairs.
A Lasting Power of Attorney that only comes into effect if you lose capacity is very inflexible. If you have doubts about an attorney over-stepping their role there are Court of Protection safeguards in place, but ultimately you must feel sure that your chosen attorneys have your best interests in mind.
It’s essential your attorneys understand why they’ve been appointed and the extent of their powers. Our guide to Lasting Powers of Attorney can be downloaded here: Lasting Powers of Attorney, simply explained.
If you have appointed a sole primary attorney, we recommend you review your Lasting Power of Attorney for Property and Finance. Let’s discuss your thoughts and wishes, and we can explain your options.
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