A Lasting Power of Attorney (LPA) is a legal document which allows a person, known as the 'donor' to appoint one or more people, known as the 'attorney/s', to help them make decisions or, to make decisions on their behalf. This gives the donor peace of mind that if they lack mental capacity and cannot make decisions for themselves, someone will be able to step into their shoes and deal with the donor's legal affairs.
The donor must be 18 or over and have the ability to make their own decisions at the time the LPA is made. There are two types of LPA:
1. Health and welfare lasting power of attorney
This is used to give an attorney the power to make decisions about things like:
- The donor's daily routine, for example washing, dressing, eating
- medical care
- moving into a care home
- life-sustaining treatment.
2. Property and financial affairs lasting power of attorney
This is used to give an attorney the power to make decisions about money and property, for example:
- managing a bank or building society account
- paying bills
- collecting benefits or a pension
- selling the home.
Many people make a property and financial affairs LPA to ensure that payments can be made from their bank account and their finances and property can be properly dealt with in the event that the donor no longer has capacity to deal with these issues. However, there is often a question mark as to whether the attorneys can use an LPA for more complex matters and the High Court has recently considered one such issue.
The case sadly involved the all too frequent situation of a family dispute about a property. A lady was the sole owner of her property and appointed her daughter to be her attorney. The daughter transferred the legal title of the property into the joint names of herself and her mother, claiming that the power-of-attorney gave her authority to do so. After the death of the lady, the transfer of the property was challenged by her son who was the executor of her estate.
The case revealed that the deceased had discussed the situation in some detail with her solicitor including appointing her daughter to be her attorney, leaving her property to her daughter in her will rather than to her four children and the possibility of transferring the property into the joint names of herself and her daughter. If these were, indeed, the deceased's wishes, it is unfortunate that the transfer of the property did not take place whilst she had mental capacity to do so because the court held that the transfer under the LPA was void.
The authority of the LPA did not extend to gifting the property in this manner. The duties of an attorney are specific and interestingly, the court concluded that the attorney should have 'taken steps to inform herself of the true position in law, whether by taking specific legal advice on the issue (which on the evidence she did not do), or otherwise'.
This case reminds us that the transfer of property can be a complex matter when the homeowner is on the cusp of losing mental capacity. Taking specialist legal advice could save the stress and expense of a court hearing.
To discuss this or any other property matter, contact us.