GENERAL POWERS OF ATTORNEY

SECTION 10

POWERS OF ATTORNEY ACT 1971

Position Before Trustee Delegation Act 1999

(pre 1.3.2000)

1.   Could not delegate trust functions

Position After Trustee Delegation Act 1999

(after 1.3.2000)

1. Can delegate permitted trust functions (unless prohibited by trust deed)

NB  Easier to use a Trustee Power of Attorney under Section 25 Trustee Act 1925 for trust functions

2. Could not be used once donor mentally incapable.

Thus little used after EPA’s introduced in 1985.

2. Position unchanged

NB  Better to use an EPA where appropriate so can still be used after donor mentally incapable (after registration with Court of Protection)

TRUSTEE POWER OF ATTORNEY

UNDER SECTION 25 OF THE

TRUSTEE ACT 1925

Position Before Trustee Delegation

Act 1999 (pre 1.3.2000)

1. Can last for a maximum 12 month period from the date of the power or the date specified in the power.

Position after Trustee Delegation Act 1999 (after 1.3.2000)

1. New form of S.25 Power.  Can delegate for maximum of 12 months from the commencement of the power.  If the power is silent as to commencement delegation is 12 months from execution.

PROBLEM AREA

(i) Can the commencement be described rather than dated e.g. from the date of a grant of Probate

(ii) When is a power executed – signing delivery or dating?

2. Grey area whether separate power needed for each settlement or if one power could include several settlements.

2. Need separate power for each settlement.

3. Need to serve written notice on each co-trustee

3. Must either before or within 7 days of giving the trustee power give notice to the co-trustee/s and any person entitled to appoint a new trustee.  Conveyancer has no need to check whether notification is made to co-trustees.

4. Donor liable for the acts and omissions of the Attorney.

4. Donor is liable for the acts/defaults of the Attorneys.

5. Settlement can exclude or restrict the right to delegate under S.25.

5. Unchanged. Need to check the Power of Attorney and Trust Deed to see they comply with S.25 and do not exclude trustee’s powers to delegate.

6.  Could not delegate to only co-trustee

6. Can delegate to sole co-trustee. 

If intend to deal with land capital proceeds of land or income from land then need an independent attorney so can get a receipt for capital monies from 2 persons.

Can appoint another trustee under S.8 TDA 1999 to give a good receipt for capital monies.  Use of S.8 is subject to contrary provision in the settlement.

PROBLEM AREA

If the settlor has power to appoint new trustees under the settlement is this a “contrary provision” preventing use of S.8?

TRUSTEE DELEGATION ACT 1999

Position before Trustee Delegation Act 1999 (pre 1.3.2000)

Position after Trustee Delegation Act 1999 (after 1.3.2000)

1.  Power can continue to be used after donor is or is becoming mentally incapable provided registered with Court of Protection

Unchanged

2. Limited powers to make gifts without consent of Court of Protection

Unchanged

3. Can delegate to single attorney or more than 1 attorney (either joint or joint and several)

Unchanged

4. An EPA to joint attorneys (not joint and several) cannot be used if one of the attorneys dies or is unable or unwilling to act.

Unchanged

5. Could delegate trust functions to an attorney under section 3(3) of EPA 1985.

5A An attorney cannot perform trust functions under an EPA made after 1.3.2000 UNLESS the act in question relates to:-

(a) Land or

(b) The capital proceeds of a conveyance of land or

(c) Income from land

AND

At the time the act is done the donor has a beneficial interest in the land proceeds or income.

(These will be called “permitted trust functions” in these notes)

PROBLEM AREAS FOR 5A.

(1) If land is sold would this cover assets purchased with the proceeds or subsequent replacement assets?

(2) When is an act “done” – execution of documents exchange or completion for a sale?

(3) If in doubt get a Trustee Power of Attorney under S.25 Trustee Act 1925.

(4) Your client is a purchaser from trustees or co-owners.  Your client will be protected if the attorney makes a signed statement under S.2 TDA 1999 when doing the act in question or within 3 months after the act that the donor had a beneficial interest in the property at the time of the act.  When is the act – execution or exchange or completion? The statement is only conclusive evidence of the donor’s beneficial interest.

(5) You still need to check the EPA and the trust document creatingthe trust to see if they exclude power to delegate.

5B. If the EPA was made before 1.3.2000 and an application is made to register the EPA with the Court of Protection before 1.3.2001 then the attorney CAN exercise ALL trust functions even after 1.3.2001 unless the registration is cancelled or refused.

PROBLEM AREAS FOR 5B.

(1) Can only register EPA if donor is or is becoming mentally incapable.

(2) Need to apply to the Court for registration before 1.3.2001.  When is the application made?

(a) Date on form EP2? Or

(b) Date of letter to the Court applying for registration? Or

(c) date of receipt of the letter by the Court?

6. A power could be given to a sole co-trustee or co-owner to exercise trust functions e.g. if spouses owned land jointly each could give a power to the other.  The attorney could sell the land signing on his own behalf and as attorney for his wife’s share.  There was no need for a second independent attorney.

Cannot use an EPA to get round the rule that need a minimum of 2 trustees to give a good receipt for capital monies where exercising a permitted trust function. 

May need to appoint an additional attorney where creating an EPA after 1.3.2000 to prevent the proceeds of sale going to one person only if the attorney exercising permitted trust functions is the only other co-owner or trustee.

If an EPA is created AFTER 1.3.2000 then S.8 TDA 2000 enables an attorney under a power which has been registered with the Court of Protection to appoint a new trustee to get round this problem. 

An attorney appointed under an EPA dated before 1.3.2000 will not need an additional attorney to give a good receipt for capital monies for permitted trust functions for dispositions prior to 1.3.2001.  After that period need an additional attorney unless EPA registered before 1.3.2001.

PROBLEM AREAS FOR 6

(1) An EPA created after 1.3.2000 delegates to the only co-owner or co-trustee who wishes to exercise permitted trust functions and get a good receipt for capital monies.

SOLUTION  Use S.8 TDA 1999 to appoint another trustee if power has been registered.  If unregistered give a new EPA.

(2) An EPA created before 1.3.2000 delegated to the only co-owner or co-trustee who wishes to exercise permitted trust functions and get a good receipt for capital monies.  The power is NOT registered before 1.3.2001.

(a) Create a new EPA or S.25 Trustee Power if donor still has mental capacity.

(b) If donor lacks mental capacity CANNOT use S.8 to appoint a new trustee for EPA created before 1.3.2000.  Will have to apply to the Court under S.36(1) Trustee Act 1925 to appoint a new trustee.  THIS MAY CAUSE PROBLEMS IN PRACTICE.  The attorney can exercise permitted trustee functions but not get a good receipt for capital monies unless an additional trustee is appointed.  This applies to dispositions after 1.3.2001

7. Donor gives an EPA in a non trustee capacity

Unchanged

8.  If the donor needs a Will and lacks mental capacity then the Court of Protection needs to make a Statutory Will.

Unchanged