LPAsJointly Owned Property and Attorneys

17 May 2019by Chris Smith1
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It is fairly common for married couples to want to name each other as sole attorneys in their Property and Financial Affairs Lasting Power of Attorney (LPA). Whilst there is nothing wrong with this appointment, clients should be advised that naming the spouse could cause some difficulties where the couple own land jointly with each other.

Background

All jointly owned property is held on a trust of land. In the majority of cases, it will be that the two owners are acting as trustees holding on trust for themselves although this may not necessarily be the case.

Two Trustee Rule

Where property held on a trust of land is sold, at least two trustees are required (apart from where a sole trustee is a trust corporation) to give good receipt for the proceeds of sale or other money arising.

LPA Concerns

In the case of a couple, appointing each other as sole attorneys and they jointly own a property together there are some concerns when one of them loses capacity.

A trustee can delegate their powers by power of attorney under S25 Trustee Act 1925. An attorney under an LPA can therefore assume the donor’s duties as a trustee.

Where co-owners name each other sole attorneys, this causes issues as the owner cannot sign for the sale in their own name and also as an attorney for the other owner who has lost capacity.

In the event that the property needs to be sold, the spouse would need to appoint a further trustee to act alongside them under S36 Trustee Act 1925. There would likely be additional fees payable at that time to name a further trustee and clients should be aware of this.

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