Case law: Power of Attorney can contain complex conditions and still take effect

Thursday 9th July 2015

Individuals making a Property and Financial Affairs Lasting Power of Attorney (LPA) can require complex conditions to be satisfied before it takes effect, but these should be drafted very carefully for the LPA to be effective.

 

A wealthy individual wanted to make a Property and Financial Affairs Lasting Power of Attorney (LPA) in case he lost the ability to manage his own affairs. He wanted to ensure he really had lost the ability to make decisions before his attorneys took over his affairs. He also wanted to lower the chances they would make hasty decisions he might disagree with if he subsequently regained the ability to manage his affairs.

 

His advisers put complex conditions into the LPA that had to be satisfied before his attorneys could act, including that:

 

  • Two psychiatrists with specified qualifications had to verify his mental capacity.
  • Their opinions had been approved by a named friend (called his 'protector' in the LPA).
  • A period of 60 days had elapsed after the psychiatrists had given their opinions.
  • No other psychiatrist had disagreed with the psychiatric opinions the attorneys were relying on.

An LPA must be registered with the Public Guardian before it takes effect, ie, before the named attorneys can take over the financial affairs of the person making it. The Public Guardian argued that most of the extra conditions were legally ineffective or unworkable, and it would only register the LPA if they were removed.

 

The Court of Protection ruled that although there were legal rules allowing the Public Guardian to refuse to register an LPA, the careful way this one had been drafted meant it fell outside those rules, and he had to register it.

 

Operative date

  • Now

Recommendation

  • Individuals wishing to make a Property and Financial Affairs LPA appointing attorneys to look after their financial affairs if they lose mental capacity, can include complex conditions that must be satisfied before it takes effect.
  • However, these should be drafted carefully or the Public Guardian may be able to refuse to register it.
  • If in doubt, legal advice is strongly recommended.

Case ref: Re XZ (2015 EQCOP 35)

 

 

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Author: Richard Ainsworth

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