Lasting Powers of Attorney – Joint Assets

Christopher McNeill says – You may need to look beyond the official guidance in dealing with jointly owned assets

Lasting Powers of Attorney (LPAs) are more popular than ever. At the end of 2019, over 800,000 had been registered with the Office of the Public Guardian (OPG) and in 2020 approximately 20,000 LPAs a month are currently being processed. A third of these are digital applications.

The Government has always advised that the completed LPA should be as simple as possible. This may be why the forms and procedure have been simplified three times in the 12 years since they were introduced. This may also be why the OPG suggests a solicitor’s help is not required to complete the process, which the statistics for digital applications seem to support.

It is still very easy to make simple mistakes in completing a simple form.  The OPG’S own guide highlights mistakes which it sees again and again. Apart from the obvious mistakes, like using the wrong form or failing to sign in all the places required, the  two most serious are to include provisions which are either a) contradictory or b) unlawful.

All of the government’s guidance is worth reading and following. In particular you should note the advice – which ought really to be made more prominent – that appointing attorneys “jointly” can have the unexpected consequence that if any one of the attorneys becomes unable or unwilling to act then the whole appointment of attorneys falls down.  There is only one practical solution to this: another LPA will be required and maybe by then the donor is no longer in a position to make one.

What the guidance does not make clear is how best to deal with joint property. Any leasehold or freehold property held jointly is, in the view of UK land law, held by the owners as trustees for themselves. It is not practicable for one joint owner to give their co-owner a power of attorney over their own equitable share. The attorney will be able to take some decisions on behalf of the other owner but will be unable to sell the property – often the main purpose of granting the power in the first place.

A separate LPA should therefore be given to another trusted family member or friend if there is a real possibility that a joint asset, often the family home, may be sold at some time in the future.  The LPA should expressly state in Section 7 “Preferences” that the power is to cover any interest that the donor has in joint property. The attorney can then act jointly with the other co-owner.

Although our offices are currently closed, we are still very much open for business. If you wish to discuss any of the above issues please do get in touch and we shall be happy to assist.