Lasting powers of attorney (LPAs) enable thousands of vulnerable people to have their financial and other affairs managed by others whom they trust. However, as a High Court case showed,...Continue reading
Many people very sensibly confer lasting powers of attorney (LPAs) on others so that their affairs can be properly managed in the event that they lose the ability to do so themselves. However, as a High Court ruling underlined, it often makes good sense to appoint a professional, rather than a loved one, as your attorney.
The case concerned a woman who, by her will, bequeathed her home equally to her four children. About two years prior to her death, aged 93, an LPA was registered in favour of her daughter. The daughter subsequently used the power conferred on her by the LPA to purportedly transfer the property, which was formerly owned solely by her mother, into her and her mother’s joint names, as tenants in common.
The result of the transfer was that, when the mother died, her daughter’s half share of the property fell outside her estate. That in turn meant that the inheritance of her other three children was significantly reduced. Acting as executor of her estate, her son challenged the transfer on the basis that the daughter had no power or authority to make it.
Upholding his claim, the Court noted that the half share in the property was a gift to the daughter. Section 12 of the Mental Capacity Act 2005 requires that an LPA may generally only be used to make gifts of reasonable value to charity or to loved ones or other connections on customary occasions, such as birthdays or anniversaries. Gifts that do not fall within those exceptions must be authorised by the Court of Protection.
Such authority having neither been sought nor granted, the High Court concluded that the transfer was void. The registration of the daughter’s half share in the property was therefore a mistake on the face of the Land Register. The Court ordered that the Register be rectified to the effect that the mother remained the property’s sole owner at the date of her death.