Q&As

A 2013 trust deed establishes a life interest for the benefit of the settlor. The trust deed provides that if the settlor becomes mentally incapable of managing their own affairs, any power vested in them shall be vested instead in such persons as would enjoy the power if the settlor were dead. The settlor has now lost mental capacity. The trust deed gives the settlor power to surrender their life interest and now that they have lost capacity, their attorneys for property and finances are considering exercising the power. Do the attorneys have the power to do so or have the settlor's powers vested in those entitled to act as though they had died?

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Published on LexisPSL on 11/02/2021

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • A 2013 trust deed establishes a life interest for the benefit of the settlor. The trust deed provides that if the settlor becomes mentally incapable of managing their own affairs, any power vested in them shall be vested instead in such persons as would enjoy the power if the settlor were dead. The settlor has now lost mental capacity. The trust deed gives the settlor power to surrender their life interest and now that they have lost capacity, their attorneys for property and finances are considering exercising the power. Do the attorneys have the power to do so or have the settlor's powers vested in those entitled to act as though they had died?

A 2013 trust deed establishes a life interest for the benefit of the settlor. The trust deed provides that if the settlor becomes mentally incapable of managing their own affairs, any power vested in them shall be vested instead in such persons as would enjoy the power if the settlor were dead. The settlor has now lost mental capacity. The trust deed gives the settlor power to surrender their life interest and now that they have lost capacity, their attorneys for property and finances are considering exercising the power. Do the attorneys have the power to do so or have the settlor's powers vested in those entitled to act as though they had died?

This Q&A assumes that the settlor has made a Financial lasting power of attorney (LPA) which has been registered and which does not specify any particular conditions or restrictions on the attorneys’ authority.

A Financial LPA does not provide attorneys with the power to exercise settlor powers on behalf of a donor who has lost capacity. Attorneys’ power to make gifts on behalf of a donor is limited and it is only available without court approval in certain circumstances, such as making gifts on the occasion of a family member's birthday. This limitation would extend to attorneys seeking to give away an interest in settled property to which the

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