The risks of not having an LPA – a case study
At Attwaters Solicitors, we regularly advise clients on the importance of preparing for the unexpected, particularly when co-owning a property. One of the most important steps you can take is putting an appropriate Lasting Power of Attorney (LPA) in place. To highlight just how critical this can be, we’re sharing the story of Mr and Mrs Smith (names changed for confidentiality), who experienced first-hand the repercussions of not appointing an attorney.
The situation
Mr and Mrs Smith owned their home together as joint tenants, meaning they both had equal rights to the whole property. Later in life, Mr Smith sadly developed dementia and was deemed to have lost capacity. Unfortunately, he did not have an LPA in place, so Mrs Smith was not legally able to manage his affairs, including anything related to their jointly owned property. Mrs Smith therefore needed to apply to the Court of Protection for a suitable order; she appointed a law firm to do this on her behalf. She was issued a Deputyship Order which granted her general powers relevant to the management of Mr Smith’s property and financial affairs.
An added complication
As a result of their situation, Mrs Smith made the difficult decision to sell their marital home. She naturally assumed that the Deputyship Order gave her the authority to sell the property, so she instructed Attwaters to act on her behalf. However, it soon transpired that the Court Order she had obtained did notgive her the power to sell the home; she also needed to apply to the Court of Protection for a separate Section 36 Trustee Order before being able to proceed with a sale.
What happened next
Mrs Smith had to revert to her previous solicitors to make an urgent application to be appointed a trustee in place of her incapacitated husband, which incurred extra costs. It took four months for Mrs Smith to be appointed trustee, however it could have taken much longer; it is difficult to predict when orders will be issued, as it is highly dependent on the workload of the Court.
As a result of the delays, Mrs Smith lost the buyer for her house and had to find a new one. So, a transaction that should have taken a few months to complete ultimately stretched to over a year. This meant that Mrs Smith had to foot the bill for her husband’s care home fees before selling the home, causing significant financial stress at an already difficult time.
The lesson
This case is a reminder of the potential consequences of not putting an appropriate LPA in place. If Mr Smith had appointed an attorney (someone other than just Mrs Smith) before losing capacity, the sale could have gone ahead without the significant additional complication of having to apply to the Court of Protection for suitable orders. Thereafter, Mrs Smith would have been able to manage her husband’s affairs without the continued involvement of the Court.
Don’t leave it too late
LPAs are often seen as something to sort out “one day” but unfortunately, life doesn’t always wait. Taking the time now to put the right legal protections in place can make a world of difference further down the line – not only for you, but for your loved ones as well.
If you co-own a property and haven’t yet made an LPA, we strongly recommend seeking professional legal advice. Our friendly team is here to help guide you through the process – just get in touch with Lesley-Ann Mayhew or Katharina Vidojevic.
