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.