Incapacitated Trustee - Life Tenant, LPA and Legal Owner

Trusts Discussion
1

We have been instructed by the Attorneys of P to sell P’s property as he has now moved into permanent residential care. P and the Attorneys are all on the legal title. The beneficial interest is owned 1/3 P, 1/3 to one of the Attorneys and 1/3 subject to a LIT . P is the life tenant of the LIT and is trustee alongside his two daughters, who are also P’s two Attorneys.

We believe the property can be sold without the need for a COP application using s1 TDA – is our understanding correct? We believe because of s1 TDA P does not need to be retired as trustee of the LIT before the property is sold but please can we have views on this.

We further believe that in order for the LIT to be administered going forward, P will need to be retired with a COP application as he has a beneficial interest in the trust. But what can be done in the interim with the proceeds of sale in the LIT and who has authority to deal?

2

You don’t say, but I am assuming P has lost capacity.

I think you are covered by section 1 of the Trustee Delegation Act 1999:

The donee of a power of attorney is not prevented from doing an act in relation to—

(a)land,

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

(c)income from land,

by reason only that the act involves the exercise of a trustee function of the donor if, at the time when the act is done, the donor has a beneficial interest in the land, proceeds or income.

3

Thank you Mark. Yes, P has lost capacity. Does s 1 TDA apply to the ongoing management of the capital proceeds of a conveyance as trustee in ongoing running of the LIT i.e., in place of the trustee who cannot act because of their role as attorney for P? Do you think P needs to be retired in any case under a COP application?