insideKENT Magazine Issue 25 - April 2014 | Page 153

LAW POWERS OF ATTORNEY NOW CAN HELP IN LATER LIFE Mental incapacity is becoming an increasing risk for all of us, so it is recommended to plan ahead to ease the potential burden on loved ones when selling jointly owned property. Anne Lewis, a partner in the Private Client team at Cripps Harries Hall, explains some of the difficulties readers may encounter if one of the joint owners has lost mental capacity. Anne Lewis My husband and I have powers of attorney for each other and therefore can sign for the other if one of us loses capacity, can’t we? This is a common misconception. You and your husband are treated as owning the property on trust for yourselves and each other as trustees. Two trustees are required to receive the proceeds of sale of a jointly owned property. If, for example, your husband loses capacity, he cannot act as a trustee and even if you can act on his behalf under a power of attorney, you cannot be the second trustee as well as the first trustee. If you want to sell your property, you will need to appoint a new trustee in his place. This could involve getting a medical report to confirm your husband’s lack of capacity, including the appropriate wording in the transfer of the property. You can only appoint the required additional trustee if the power of attorney has been registered. There are two different sorts of power of attorney which deal with mental incapacity. If your husband has set up an Enduring Power of Attorney, although you cannot make new Enduring Powers of Attorney, you can use it if it already exists. Registration takes at least six weeks. In the case of a Property and Affairs Lasting Power of Attorney registration is currently taking 10-14 weeks. A better option is to set up a Property and Affairs Lasting Power of Attorney now, which appoints at least two people you trust as your attorneys. The second attorney can sell your property as a trustee with your wife. To be effective the power of attorney will need to be registered. As mentioned previously, registration takes up to three months so it is sensible to register the power as soon as possible to avoid a delay in selling your property at a later date. How to avoid problems The sale of a property, which is widely acknowledged as a stressful event in itself, can become convoluted and more expensive if one of the coowners has capacity issues and steps have not been taken to deal with this before a sale is agreed. Due to the inevitable delay there is a risk that an impatient purchaser will withdraw from the transaction. Review your affairs with a specialist solicitor now, to ensure that when the time is right, your property can be sold without undue complications. If you would like advice on setting up a Lasting Power of Attorney or you would just like an informal chat, please call Anne Lewis, partner, on 0845 467 4690 or email [email protected]. We currently have nothing in place should one of us lose capacity. I have heard the court will take care of matters and give my wife authority and therefore we wish to avoid incurring expenditure now. If you do not plan ahead and subsequently lose capacity, your wife, as coowner, may be left in a position of wanting to sell the property – perhaps to pay for your care fees. The Court of Protection can appoint your wife as your Deputy to take control of your financial affairs, but this is a lengthy process (taking more than three months). A Deputy does not have the power to deal with jointly owned property and an additional application is needed to cover this. The cost of appointing a Deputy far outweighs any immediate cost saving you make now. You will incur the court application fee, an annual court fee and annual premiums to insure against the possibility of you wrongly depriving your husband of funds, plus you will have to submit annual reports to the court. 153 This article gives examples and is intended as general guidance only. About Cripps Harries Hall www.crippslaw.com @crippslaw Cripps Harries Hall, the leading solicitors in Kent, recently merged with Vertex Law and now has offices in Kings Hill as well as T unbridge Wells, London and Discovery Park, Sandwich. Whether you are going through a divorce or personal dispute, you need a will or are moving, we have a team of highly experienced lawyers who can help.