Published on: 11th December 2023

Why Trustees should consider creating Lasting Power of Attorney documents

A Lasting Power of Attorney (LPA) is a useful legal document that Casey & Associates recommend any individual with sufficient mental capacity to create. Having LPAs can provide peace of mind for people as they know that they have taken the necessary steps to ensure someone they trust can take over making decisions on their behalf when they are no longer able to.

However, those individuals who have undertaken the role of a Trustee (for in-life or testamentary trusts) are especially encouraged to create a Property & Financial affairs LPA. When trustees have a beneficial interest in a trust which concerns land, capital proceeds of conveyance of land or income from land, it is important that the trustee has someone who can make decisions for them when they no longer can. An example is the Life Interest in Property Trust that thousands of our clients have within their Wills.

The role of a Trustee is a very important one. They must act in the interests of the beneficiaries and work together to make unanimous decisions. However whilst a settlor hopes their Trustees will collaborate in carrying out this role, no one can predict what will happen in the future and problems can occur if a Trustee loses mental capacity, meaning they can no longer act. Under Section 36 of the Trustee Act 1925 and Section 7 of the Trustee Delegation Act 1999, if the incapacitated Trustee has a Property and Financial Affairs LPA, the powers should be delegated to their nominated attorney(s). Although the loss of capacity of a Trustee isn’t something that will definitely happen, the Trustee having an LPA can be seen as a very effective ‘insurance policy’ against a trustee losing mental capacity.

When a Trustee does not have an LPA and loses mental capacity, it can cause a variety of different issues depending on the circumstances. Decisions made by Trustees must be made unanimously, and so where there is a Trustee who lacks sufficient mental capacity to understand the decisions they’re making, then no decision can be made. The only option in this case would be to go to Court to apply to discharge the incapacitated Trustee. This can be costly and time consuming, and also means that the remaining Trustees cannot make any decisions in relation to the Trust whilst the application is ongoing.

Please note that although there are many occasions when an attorney can act for a trustee there are some where this is not the case.

If you would like to speak with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.

======================================

If you wish to give instructions or require general information about our Wills, Lasting Powers of Attorney, or Trusts then we will carry out a telephone or Zoom appointment.

However, if you wish to give instructions to one of our Consultants and you feel that you can only do this at a Face to Face meeting then we are offering, at our Consultant’s discretion, a limited number of Face to Face appointments in most of the areas we normally cover. To see the areas we normally cover please click here.

To arrange an appointment please telephone 01732 868190 or click here.

======================================

Back to all news