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EPA between spouses

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Hi all

Following on from Kittie's post yesterday in the thread about how to put a property in trust (to avoid it getting used for care costs). Kittie said that it's possible for EPA to be set up between spouses and that she had done so using willwriters online.

I hadn't realised that it was possible to do this between spouses and I went on to the will-writers site. So far so good. DH thinks it is a good idea. We've had clarification of a piece of wording on the document which didn't make sense to us, again, so far so good. However....

They point out that in the event of one of us becoming incapable, and the other one wanting to sell the house, because the house is in joint ownership, either JT or TIC doesn't matter, to sell the house would require two signatures and therefore, they strongly, strongly recommend that we appoint another attorney. The obvious choice would, for me, daughter living 250 miles away, or for him, son living 190 miles away.

DH is implacably opposed to the idea of any of our close family being given this kind of power and I agree with him.

Actually, I can't see how it would ever arise. Worst-case scenario, one of us is totally ga-ga as a result of a massive stroke, is reduced to a vegetable and in a home. It's my understanding that the other spouse can't be forced to sell the home - we're both over 60 and disabled. The only time one of us will want to sell this and move is when one of us dies, in which case the house belongs to the survivor 100% and no other signature is needed.

There are no foreseeable circumstances in which either of us would need to access the other's bank accounts during the lifetime of the other. Our finances are set up to run so automatically, by electronic means, that it could all continue for a lengthy period of time without any interference whatsoever.

The possibilities are: either we go to our local solicitor and ask him to be the second signatory (get him to draw up the EPA and keep it with our wills) or we scrub the idea altogether.

Any thoughts, anyone?

Best wishes

Margaret

PS: This is all a distraction for me since I'm still trying to revise for the second of 2 GCSE Maths exams. first one 2 days ago, second next Monday!
[FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
Before I found wisdom, I became old.
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Comments

  • Biggles
    Biggles Posts: 8,209 Forumite
    1,000 Posts Combo Breaker
    They point out that in the event of one of us becoming incapable, and the other one wanting to sell the house, because the house is in joint ownership, either JT or TIC doesn't matter, to sell the house would require two signatures
    That sounds nonsense to me.

    The whole point of an EPA is that one is legally entitled to act on behalf of the other. A solicitor would be obliged to accept the attorney's signature on behalf of the incapacitiated one. I have just sold my mother's house as her attorney with no problem at all and without any reference to her (except by me, obviously).

    You don't need to go through a will writer or solicitor, the forms are very simple and are free from the Public Guardianship website.
    http://www.guardianship.gov.uk/downloads/Make_An_EPA.Web.pdf

    But I would recommend two attorneys (on the 'joint and several' basis so that either can sign for you), as the EPA lasts indefinitely and if, for example, something happened to your husband years in the future after you went, as you say, ga-ga, the whole thing would become invalid. Obviously, it needs to be someone you can trust and preferably who is organised. And not a solicitor unless you want to pay a very considerable amount in fees.
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    Biggles wrote: »
    That sounds nonsense to me.

    The whole point of an EPA is that one is legally entitled to act on behalf of the other. A solicitor would be obliged to accept the attorney's signature on behalf of the incapacitated one. I have just sold my mother's house as her attorney with no problem at all and without any reference to her (except by me, obviously).

    Thank you, Biggles.

    But when you sold your mother's house, was it owned only by her, your father having died? This is not what we're questioning.

    The only scenario we can visualise of one of us wanting to sell this house is if the other one had died, in which case it becomes 100% the property of the survivor. Even if one of us was a vegetable and the other one wasn't, the one who wasn't would need somewhere to live, and selling the house to raise funds wouldn't be an option because he/she would need somewhere to live!
    You don't need to go through a will writer or solicitor, the forms are very simple and are free from the Public Guardianship website.
    http://www.guardianship.gov.uk/downloads/Make_An_EPA.Web.pdf
    So what do you do about registering the EPA?
    But I would recommend two attorneys (on the 'joint and several' basis so that either can sign for you), as the EPA lasts indefinitely and if, for example, something happened to your husband years in the future after you went, as you say, ga-ga, the whole thing would become invalid. Obviously, it needs to be someone you can trust and preferably who is organised.

    Ah, but this last is the stumbling-block.

    Thanks for your input.

    Margaret
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    The only scenario we can visualise of one of us wanting to sell this house is if the other one had died, in which case it becomes 100% the property of the survivor.

    There might of course be a charge registered against it by the council, so that if it was sold, they could recover the costs of the care of the person who has died.

    In which case presumably you wouldn't be wanting to sell the house, unless the remainder of the money was to be used to pay for your own care.
    Trying to keep it simple...;)
  • Biggles
    Biggles Posts: 8,209 Forumite
    1,000 Posts Combo Breaker
    But when you sold your mother's house, was it owned only by her, your father having died? This is not what we're questioning.
    It was, of course, but my point was really that the EPA enabled me to sign on behalf of my mother. In your case, it would enable you to sign on behalf of your husband (or vice versa). If they want you to sign twice, once for yourself and once for him as it's jointly owned, so be it ;-)
    So what do you do about registering the EPA?
    You don't need to register the EPA until one of you loses (or is losing) 'mental capacity'. Till that point, once the EPA is complete, either of you can act on behalf of the other on production of the EPA (or a certified copy). Once one has 'lost mental capacity', you can to register it yourself with the Public Guardianship Office. Full instructions are given on their website and it seems very straightforward (that's all a solicitor would do; the only difference is that he would charge you for doing so).
    Ah, but this last is the stumbling-block.
    Yes, I do understand that; in that case, each of you becoming the other's only attorney would have to be the answer.
  • Hi Margaret,

    Most people are unaware that when they buy a house jointly (either as 'joint tenants' of 'Tenants in Common') they create an 'implied' trust (sometimes referred to as a 'resulting' trust.) It is this trust element that can create problems with a spouse attorney, and your attention is drawn to this risk on the instructions contained within the EPA.

    My understanding is that .... without going into great detail .... this element of trusteeship can create problems in certain cases when providing a discharge for a property transaction; one trustee (even when acting on behalf of two people) is insufficient.

    It is for this reason that many will writers and solicitors suggest having a second attorney listed on your EPA.

    By nominating your attorneys act 'jointly and severally' (as suggested by Biggles) you can set up the EPA with the intention that your spouse would be the person who will do the 'donkey' work for you should you [ever] be unable to do so; only in the extreme case of say selling your property would the second attorney's services be called upon (and in your case the need for her to travel the 250 miles or so).

    As you and your dear husband (I presume that's what 'DH' stands for; I'll understand these initials one day.) presume - an EPA is a very powerful document and should not be entered into without understanding the risks of abuse by your attorney; only if you trust your attorney explicitly should you grant them the power. Nevertheless EPAs do have an important role to play, and can relieve a family of avoidable stress, and inconvenience.

    One feature that you might want to consider is limiting the powers of your attorney. I do this for all my clients under the age of 65 - it reduces (but does not eradicate) the possiblility of abuse of the power. For clients above the age of 65 this aspect is debated at length, and the outcome will depend upon the trust/relationship of parent to child.

    Finally, yes you can download, create, and print off the EPA from the websites listed earlier. The government site - suggested by Biggles - provides them for free; you pay when using the services of the website Kittie mentioned and I do not know what extra service they provide for this additional fee. I do know if you use a solicitor, or a home-visit will writer they will (no, that should read 'they should') talk you through the risks, the costs - including registration at the Court of Protection in due course, overview the completion of the document to ensure all signatures are completed correctly and witnessed appropriately, and provide guidance on the appropriate wording to be included in the power limitation section.

    One big plus of using a professional however is that if ever the mental state of the person making the document was challenged (and this is quite common) the solicitor /will-writer - as a third party - can provide the necessary observation that the person understood what they were signing.

    Hope the above helps.
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    EdInvestor wrote: »
    There might of course be a charge registered against it by the council, so that if it was sold, they could recover the costs of the care of the person who has died.

    Ed, I thought I told you ages ago that there is no way I want the council involved. We're just not that kind of people, we don't fulfil any of the stereotypes for our age-group and we don't like the idea of someone else 'assessing' us and telling us what they think we should have/what we should do/what we're entitled to. What I'm saving and investing for is for a different kind of future than one that the council might envisage for us.

    DH and I are not 'herd animals', we're individuals who like to make our own decisions and own choices, we didn't even like being with a group of other people on a Rhine cruise over Christmas. In contrast to the lady in the other thread who stated quite openly that she intended to move into a care home because she would need looking after, we intend to stay in our OWN home and pay for help to come in if necessary. Living with a crowd of other wrinklies in a care home would be my vision of torment. 'You will be dragged out of bed at 5 am because we have to get as many as possible up before the day staff arrive, and you'll sit in front of the TV...' Dante's Inferno, the last circle of hell!

    Best wishes

    Margaret
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    Hi Margaret,

    Most people are unaware that when they buy a house jointly (either as 'joint tenants' of 'Tenants in Common') they create an 'implied' trust (sometimes referred to as a 'resulting' trust.) It is this trust element that can create problems with a spouse attorney, and your attention is drawn to this risk on the instructions contained within the EPA.

    My understanding is that .... without going into great detail .... this element of trusteeship can create problems in certain cases when providing a discharge for a property transaction; one trustee (even when acting on behalf of two people) is insufficient.

    It is for this reason that many will writers and solicitors suggest having a second attorney listed on your EPA.

    Thank you very much for the explanation, Rod. Much appreciated.

    I hadn't even realised that spouses can act as attorneys for each other until Kittie wrote.
    By nominating your attorneys act 'jointly and severally' (as suggested by Biggles) you can set up the EPA with the intention that your spouse would be the person who will do the 'donkey' work for you should you [ever] be unable to do so; only in the extreme case of say selling your property would the second attorney's services be called upon (and in your case the need for her to travel the 250 miles or so).

    As you and your dear husband (I presume that's what 'DH' stands for; I'll understand these initials one day.) presume - an EPA is a very powerful document and should not be entered into without understanding the risks of abuse by your attorney; only if you trust your attorney explicitly should you grant them the power. Nevertheless EPAs do have an important role to play, and can relieve a family of avoidable stress, and inconvenience.

    One feature that you might want to consider is limiting the powers of your attorney. I do this for all my clients under the age of 65 - it reduces (but does not eradicate) the possiblility of abuse of the power. For clients above the age of 65 this aspect is debated at length, and the outcome will depend upon the trust/relationship of parent to child.

    Finally, yes you can download, create, and print off the EPA from the websites listed earlier. The government site - suggested by Biggles - provides them for free; you pay when using the services of the website Kittie mentioned and I do not know what extra service they provide for this additional fee. I do know if you use a solicitor, or a home-visit will writer they will (no, that should read 'they should') talk you through the risks, the costs - including registration at the Court of Protection in due course, overview the completion of the document to ensure all signatures are completed correctly and witnessed appropriately, and provide guidance on the appropriate wording to be included in the power limitation section.

    One big plus of using a professional however is that if ever the mental state of the person making the document was challenged (and this is quite common) the solicitor /will-writer - as a third party - can provide the necessary observation that the person understood what they were signing.

    Hope the above helps.

    Yes, all this does help a lot, and clarifies many of the points I was asking about.

    Regarding the involvement of any family member as a second attorney, DH (yes, it's shorthand for 'Dear Husband'!) and I have discussed all aspects at great length. And the answer is still no. There are good reasons why not. Things have happened in the past between sisters (one deceased in 2002 aged 39 - if she had still been alive, yes). Things that I wouldn't have believed until they happened, and even now, a relationship that sometimes feels like walking on eggshells. Not really a question of trust/no trust, more a question of not wishing to put the temptation into someone's way!

    Re the limitation clause, we have included 'this power shall not come into effect whilst I am able to conduct my own affairs' and it also says 'I intend that this power shall continue even if I become mentally incapable'.

    Although, quite honestly, I wonder now if it is even necessary. Our finances are set up to run so automatically by electronic means, money comes in and goes out, we wouldn't need to do anything for a long time. We each get our incomes separately so one of us wouldn't be destitute even if the other one couldn't 'get to the post office to draw pensions' which is the usual problem (we don't do that anyway!)

    Well, I downloaded this package from the site that Kittie mentioned, paid £39 for it, but we haven't yet signed anything. I think that anyone who knows us at the moment will be well aware that we both have all our marbles - people at church etc. I'm still struggling with trigonometry - the last exam on Monday - and I think that says something about my mental capability!

    Best wishes

    Margaret

    PS: DD - dear daughter, DS - dear son, GD - granddaughter. etc etc
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • Hi Margaret,

    In your posts you keep on stating that all your finances are sorted out, and therefore you question the need to make an EPA.

    However, I wonder if you have missed a crucial point. Yes, an EPA does allow your nominated attorney to act on your behalf, and from your earlier posts your attorney would not be needed that much because so much of your financial transactions are automated. Well done.

    However, the point you have not stated is what happens if you loose your mental capacity to look after your own financial affairs - something over which we have no control. The law (simplified) states that if a person looses their capacity to look after their own affairs then their affairs are controlled by the Court of Protection (COP). If no one has an EPA then the COP will appoint someone on their behalf.

    So, lets suppose that yesterday you lost the ability to look after your own affairs. Then today the Court of Protection would be ...

    1. checking for a registered EPA; if not found ...
    2. approach your family to see if someone within your family wants to apply to become your attorney; and if no one does ...
    3. appoint an attorney on your behalf. (often a solicitor - who is paid accordingly.)

    OK, so the timings are a little optimistic; it takes considerable time to sort out (Usually around 16 weeks), but the fact still remains - all people who have lost their ability to look after their own affairs have an attorney appointed to them by the COP; either one of their own choice (through an EPA), a family member (who has 'stepped into the breach' and made formal application), or a professional (appointed by the Court).

    Reflect for a second. Do you want to leave the choice of attorney to your family, or even to the COP?

    An attorney, appointed under an EPA, is under an obligation to register the EPA with the COP as the person heads towards not being able to look after their own affairs. Yes, it puts the onus on them - the attorney, and indeed this is often the hardest decision they have to make - because in effect they are stating to the whole wide world that your loved family member has 'lost it'. A horrendous decision that I am personally faced with at the moment; it's not easy.

    You will see from the above though that if you make the decision now, whilst you have mental capacity, you can at least look forward to your future knowing you have taken this aspect into your control; you have made the choice. Without an EPA anyone from your family could apply; you have absolutely no control over the choice.

    As advised earlier, in other posts (kittie's in particular), the EPA is scheduled to be replaced on 1st October 2007 with the Lasting Power of Attorney - a far more comprehensive document that will require registration at the time of execution. Costs remain unknown but £1,000+ is being talked about. An EPA, made before the 1st October 2007, will remain valid (the Government have said.)

    The points made earlier in this post, however, about the risks remain. Think carefully about your choice of attorney. My suggestion would be ...

    1. each make an EPA (before 1st October 2007 - and remember it takes time to complete an EPA);
    2. include specific power limitation clauses (I am not sure yours is 'tight' enough; your solicitor will offer guidance); and
    2. keep control of the original document, placing it with your will and lodged with your solicitor.

    Hope that helps a little more.

    Rod

    P.S. Thanks Margaret for the explanation of the initials.
  • Errata
    Errata Posts: 38,230 Forumite
    10,000 Posts Combo Breaker
    Margaret, I do understand how much you and your OH are struggling with this. You're clearly both intelligent, hugely independant and self sufficient and I hope you both stay that way. I know you have a nursing background, so could I ask you to think about the mental incapacity multi infarct dementia would cause? Something that can strike anyone, whatever their IQ and self sufficiency. I certainly understand the problems that can arise when POA is given to relatives, who may not cope with things as you would have wished.
    I have no idea if solicitors can become attorneys for their clients under POA, but what about the vicar?
    .................:)....I'm smiling because I have no idea what's going on ...:)
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    Thank you to Willman Rodders and Errata for input.

    Yes, the thought of total mental incapacity had occurred to me - I mentioned above the possibility of becoming a 'vegetable'. However....

    How likely is this to happen to both of us simultaneously i.e. both of us to become totally mentally-incapable on the same day? Because if it happened to one of us then the other one would act as attorney.

    You rightly say that going to the Court of Protection etc would all take time. As I explained already, our finances are set up to run so automatically that there are no urgent needs e.g. one partner needing money for food etc, which I've seen happen.

    I am still waiting to hear back from our family solicitor, and if it seems the best option, and depending on what she says, we may do the whole EPA thing through her rather than the DIY route. It's not as simple as Kittie thought - well, it might have been for her, but not for us.
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
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