Sending money to a beneficiary that has lost capacity

[Jane Warren]

We have a fee earner about to distribute an estate. One of the beneficiaries has lost capacity but has an attorney appointed under a registered LPA. We have seen and have a copy of the LPA. The only issue is that the attorney is the beneficiary’s wife and wants us to pay his share of the estate into an account in her sole name. She says that he has no account in his own name and no joint account with her. We are executors of the estate. Does anyone have any thoughts on what we can do in this situation?

[Darren Whelan]

Hi Jane,

Do they own a home together?

[Jane Warren]

Morning Darren

Thanks for your reply. As far as we can ascertain everything seems to be in the name of the wife (his attorney). We have asked the SRA for guidance on this one as we haven’t come across it before and they have agreed after considering rule 2.15 and 3.3 that we can pay the attorney on the basis that she has the LPA but we need to document the facts. They also recommended that we send OPG guidance to the attorney re the requirement to keep the donor’s money separate from her own and that she might be in difficulty with the OPG if she fails to do so.

[Darren Whelan]

Hi Jane,

That was my view as well.

Just be mindful, there is no requirement to keep the financial affairs separate if they have a joint account or own a property, jointly.

“You must keep the donor’s finances separate from your own, unless you’ve already got something in both of your names like a joint bank account or you own a home together.”

https://www.gov.uk/lasting-power-attorney-duties/property-financial-affairs

Cheers

[Jane Warren]

Hi Darren

That’s vey helpful.

Thank you

[Darren Whelan]

Pleasure 🙂

[Geoff Smith]

A thought- why can’t she open a bank account in the name of Mrs X as trustee for Mr X?
That way she can still receive the payment intended for Mr X into that account and then distribute or make payments as she feels appropriate and also clearly identify any payments as being distinct from any joint income.

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