Legal News

A cautionary tale for attorneys

A well-drafted Lasting Power of Attorney gives an individual (a ‘donor’) the advanced opportunity to appoint someone they trust (‘an attorney’ ) to act on their behalf. This can be in relation to aspects of their property and financial affairs and/or health and welfare.

Head of our Wills, Trusts and Probate Team Zoe Fleming,  explains why it is so important to put a Lasting Power of Attorney (LPA) in place.

She also details the limits on attorneys to assist you in relation to gifts and transfer of property.

Lasting Power of Attorney

A Lasting Power of Attorney can give you peace of mind that should you lose mental capacity, your attorneys will be able to manage your affairs on your behalf. This is without the need for a costly and time consuming application to the Court of Protection.

However, the recent case of Chandler v Lombardi [2022] has highlighted that it is important for you and your attorneys to understand that there are limits on their authority to assist you, particularly in relation to gifts and transfers of property.

The Facts

The case of Chandler v Lombardi concerned Concetta Chandler, who had a history of mental health issues, including paranoid schizophrenia. During 2016, Concetta prepared Lasting Powers of Attorney in relation to both property and financial affairs and health and welfare, in favour of her daughter, Ms Janet Lombardi.

In 2018, Janet transferred her mother’s house into the joint names of herself and her mother. She signed the transfer documentation as her mother’s attorney. This action was challenged by Concetta’s son on the grounds that his mother lacked capacity to make the gift and that in any event, Janet acting as attorney, had no authority to make the gift on his mother’s behalf.

Argument

Janet argued that her mother had capacity to make the gift and that the transfer was therefore valid.

What is the law?

Section 12 of the Mental Capacity Act 2005 sets out the very limited scope of an attorney to make gifts of a donor’s property. Gifts are restricted to customary occasions (e.g. Christmas or birthdays) or to a charity that the donor might have supported if they had capacity.

Any gift must be reasonable, proportionate and affordable in the context of the size of the donor’s overall estate. It is possible for the Court of Protection to authorise larger gifts, however the attorney must seek authorisation from the court before doing so.

The verdict

The court held that the transfer of the property was void as it was outside the scope of the attorney’s authority under s12 of the Mental Capacity Act 2005. As a result, the ownership of the property at the Land Registry was rectified to reinstate Concetta as the sole legal owner of the property.

A cautionary tale

This case serves as a cautionary tale for all attorneys. If you are appointed as an attorney, it is important that you understand the limits of your authority to act, especially in relation to gifts, whether that be cash, personal possessions or property and that you must be aware of your duties.

If you have any doubt, you should always seek legal advice as to whether a proposed course of action is in line with your duties and legal obligations.

How we can help you

We have the expertise to give you the best advice. We can:

  • Advise you in relation to all aspects of managing someone’s affairs, either as an attorney or deputy,
  • Explain your duties and responsibilities as well as preparing the LPA document itself
  • Prepare an application to the Court to seek their authority for an attorney to make a gift
  • Offer advice in connection with estate and Inheritance Tax planning

Contact us

All members of our Wills, Trusts and Probate Department can assist you with any of the points above.

Members of our team include associate director Zoe Fleming, chartered legal executives Nicola Birchall, Victoria Harcourt and Rebecca Harrison, and solicitor Anna Kerr.

We have offices at Fulwood and Buckshaw Village. You can contact any of the team by calling 01772 799 600.

 

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