In 2015 Sally made a Power of Attorney appointing her daughter Jane as attorney.
In 2016 Sally had a stroke and had to go into care.
Jane needs to sell Sally’s property to pay for the nursing home accommodation bond.
Can Jane sell the property?
Provided it is necessary and appropriate in all the circumstances and in Sally’s best interests, Jane can sell Sally’s property and use the sale proceeds to finance the nursing home accommodation bond, regardless of the fact that the property is bequeathed to Peter in Sally’s Will.
What does that mean for Peter?
For Powers of Attorney made prior to 16 February 2004, the common law of ademption applies, that is if the gift to the beneficiary no long exits the beneficiary misses out.
Luckily for Peter, where a Power of Attorney is made after 16 February 2004, which Sally’s was, the harshness of the common law is ameliorated by section 22(1) of the Power of Attorney Act 2003 which states:
“any person named as a beneficiary under the Will of a deceased who executed an enduring power of attorney has the same interest in any surplus money or other property arising from sale or disposition of any property by the attorney under the power of attorney, as the named beneficiary would have had in the property if no sale or dealing had been made.”
This means that when Sally passed away Peter will be entitled to the refund of the accommodation bond, as it represents the proceeds of sale from the house bequeathed to him.
If you want your wishes to take effect, it is imperative that your documents be up to date and properly drafted. You should be aware that each case has unique facts and these general propositions cannot be applied in every circumstance to achieve the same result. The experienced solicitors at Everingham Solomons can assist you with all of your estate planning needs because Helping You is Our Business.
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