Author: Helena Luckhurst
This article is taken from Helena Luckhurst’s blog The Wealth Lawyer UK
Lasting Powers of Attorney are an essential wealth management tool for anyone who directly holds UK assets and can name at least someone whom they trust to take decisions on their behalf. They are often made by individuals concerned about who would continue to make decisions about their finances or their health and welfare if they ever lost capacity to do so themselves. They are increasingly popular – registrations of Lasting Powers topped 533,000 in the year to end March 2016; a 35% increase from the previous year. The increasing number of registrations indicates that there are more Lasting Powers in circulation.
Many clients want to appoint more than one attorney. The Lasting Power of Attorney legislation permits the appointment of both attorneys and replacement attorneys, the latter acting as substitutes. Joint attorneyships are not uncommon. Take the situation of an individual – James – who wants to appoint his wife Amy and his brother Bill as his attorneys, to act jointly in relation to his finances. His lawyer tells him that it would be prudent to name a replacement attorney too and he chooses his son Christopher. But his son is still in his twenties and, if either Amy or Bill or both were able to act, he would like them to do so in preference to Christopher.
This simple sounding request has had English law in knots for a while. English law assumes that, by appointing Amy and Bill jointly, James is saying that if Amy predeceases him, it doesn’t mean that he wants Bill to act alone. In other words, James is appointing Amy and Bill as a unit – if he can’t have both of them acting, neither of them should. Often this is not what clients like James want and, fortunately, a recent case in the High Court (Miles v The Public Guardian and Others  EWHC 2960 (Ch)) has confirmed that James can have what he wants – but only if he words his Lasting Power correctly.
The Miles case involved a ‘hybrid power’. Mrs Miles wanted her attorneys A and B to act jointly in relation to her home and transactions with a value in excess of £10,000. Otherwise she was happy for A and B to act jointly and severally. She only wanted her replacement attorney C to step in if both A and B couldn’t act. The court approved the following wording:
“I wish my attorneys A and B to act as follows:
(1) So long as both attorneys are able and willing to act, I wish them to make the following decisions jointly: sale of the house; transactions over £10,000 [or the like] but all other decisions to be made jointly and severally;
(2) In the event that one of my original attorneys A and B is unable or unwilling to act, I then appoint the remaining of my original attorneys A or B, as the case may be, as replacement attorney to act solely;
(3) In the event of both my original attorneys being unable or unwilling to act, I appoint C as a replacement attorney to act solely [with whatever variations the case requires].”
James can take comfort from this case because it provides authority (at paragraph 19) for him to appoint Amy and Bill jointly in relation to all decisions and state specifically that if either of them is unable to act, the remaining one is appointed to act solely, as replacement attorney.
James’ advisers might have told him in the past that such an appointment in a Lasting Power was impossible or would risk being challenged by the Office of the Public Guardian (as indeed happened to Mrs Miles). Clients like James may want to revisit their Lasting Powers now.
Helena Luckhurst, Partner, Fladgate LLP (firstname.lastname@example.org)