There are currently around 2.4 million Lasting Power of Attorneys (LPAs) registered in England and Wales. This figure is set to rise with an increasingly aged population and attendant increased risk of more and more people losing the mental ability to deal with their financial affairs. It’s estimated that 850,000 people in the UK already suffer from dementia.
We are often asked for advice on what an attorney can and cannot do.
Put simply, your attorney has the power to buy and sell property, manage your bank accounts and deal with any investments, as well as pay bills and collect your benefits or pension. An attorney cannot, however, make large financial gifts to themselves or others, pay themselves a fee, or use their position in any way to benefit themselves.
Issues with jointly owned property are commonly encountered.
Many, perhaps most, married couples own their home together. There are two types of joint ownership at law, ‘joint tenants’ and ‘tenants in common’.
Where property is held as joint tenants, and one of the owners dies, the property passes automatically to the survivor.
Where property is held as tenants in common, each co-owner has a distinct half share. On death, that half share doesn’t pass automatically to the survivor but under the terms of the will or, where no will is left, in accordance with the intestacy rules.
Either way, problems can arise if husband and wife both lose capacity, the jointly owned property needs to be sold, and both husband and wife have appointed the same person as their attorney. A single attorney can’t sign a property transfer on behalf of both owners; the attorney will need to appoint a second person to join in the sale. In practice, this isn’t a major nuisance but nevertheless a problem that can be avoided if, perhaps, husband and wife each appoints a different attorney, or appoints two or more persons to act ‘jointly and severally’ as their attorneys so that two names are available for the property transfer document.
The need for two signatures on a transfer deed where jointly owned property is involved isn’t limited to attorney situations. If one owner loses capacity, the other will similarly need to appoint another person to join in the sale.