An attorney can only deal with equity release once mental capacity has been lost, which is narrower than most people expect: physical frailty or a dislike of paperwork does not qualify. And where the purpose is to pass money to family, gifting rules mean the Court of Protection is likely to be involved. This sets out both, with the sources.
An attorney can only act once capacity has been lost, not merely because paperwork is difficult. And if the aim is to give money to family, that is the part the court has to approve.
Equity release may involve a lifetime mortgage, secured against your property, or a home reversion plan. It will reduce the value of your estate and impact funding long-term care.
The Equity Release Council put it in one sentence. Your attorney can only act for you if you have lost mental capacity and are unable to deal with the application and paperwork in your own right. They give the reason too: it protects your interests and avoids fraudulent applications.
So being physically frail is not enough, and neither is finding forms difficult. If there is any doubt about whether you can deal with the paperwork personally, the Council say your solicitor will insist on a mental capacity assessment. That can be through your GP, social services, or a private report, and there may well be additional fees, always so if the assessment is a private one.
The Council say it is helpful to have powers of attorney in place, especially if you are considering a lifetime mortgage with a drawdown facility. Having one and not needing it is a far better position than needing one and not having it.
How a drawdown facility works →The Office of the Public Guardian point out that someone who has capacity to make one decision may lack capacity to make another. It is not a single switch, and an assessment is about a particular decision at a particular time.
What happens in the meeting →The OPG guidance applies to attorneys under a registered lasting power of attorney for property and affairs, or under an enduring power of attorney. An unregistered document is not one an attorney can act on.
Attorneys may give occasional gifts of small amounts on customary occasions to anyone connected to the person, and gifts must be reasonable, affordable and in the person's best interests. Beyond that, the court decides.
What you leave behind →The Council's requirement that occupiers aged 17 or over take their own legal advice does not change because an attorney is acting.
The solicitor stage →This is the commonest reason people ask about equity release under a power of attorney, and it is the one the rules are strictest about. The Office of the Public Guardian define a gift broadly: moving ownership of money, property or possessions from the person whose affairs you manage, to yourself or to other people, without full payment in return.
Their position on authority is unambiguous. OPG cannot approve a gift, only the court can, and the Court of Protection cannot give unofficial advice on whether a gift may be made, so a formal application is always required. They also say an attorney is restricted by the legal limits on their gift-making authority even if the person seems to have capacity and has instructed them to make a gift.
The Office of the Public Guardian guidance states that it applies to England and Wales, and points to separate publications for Northern Ireland and for Scotland. The £325,000 figure and the de minimis exceptions above come from the England and Wales guidance.
If the property and the person are in Scotland or Northern Ireland, the framework is a different one and the figures quoted here should not be assumed to carry across. That is a question for a solicitor in that jurisdiction.
Whether a particular attorney can do a particular thing. That depends on the terms of the document, the person's capacity on the day, and whether the transaction falls inside a narrow set of legal exceptions. It is a legal question and it needs a solicitor.
Whether a court application would succeed. Only the Court of Protection can approve a gift, and no page can predict what it would decide.
Anything about what an attorney may lawfully do. That is a legal question decided by the terms of the document, the Mental Capacity Act and, where gifts are involved, the Court of Protection. We are not solicitors and not advisers, we have not seen the document, and nothing here is a view on your situation.
Equity release may involve a lifetime mortgage, secured against your property, or a home reversion plan. It will reduce the value of your estate and impact funding long-term care.
These are the questions that decide whether the attorney route is even open, and they can all be answered before an application starts.
Questions worth putting to a solicitor before an application starts.
Is this power of attorney registered, and does it cover property and financial affairs?
Both have to be true before an attorney can act at all. It is the first thing to settle.
Has capacity been assessed for this decision specifically?
Capacity is decision-specific. An assessment for something else is not the same thing.
Does any part of what we intend count as a gift?
The definition is broad. Money passing to family without full payment in return is a gift, whatever it is called.
Would we need to apply to the Court of Protection, and how long does that take?
Only the court can approve a gift, and it will not give informal guidance. A timescale changes the whole plan.
Is there a conflict between the attorney's interests and the person's?
Where there is, the de minimis exceptions do not apply at all and the court route is the only one.
Short answers to the things that come up most. None of it is advice, and every figure on this page carries its source.
Only if you have lost mental capacity. The Equity Release Council state that your attorney can only act for you if you have lost mental capacity and are unable to deal with the application and paperwork in your own right, which they say protects your interests and avoids fraudulent applications. Being physically frail, or finding paperwork difficult, is not enough.
The Council say that if there is any doubt about whether you can deal with the paperwork personally, your solicitor will insist on a mental capacity assessment. That can be arranged through your GP, through social services, or as a private report, and they note there may well be additional fees, which will always be the case for a private assessment.
Not freely. The Office of the Public Guardian define a gift as moving ownership of money, property or possessions to yourself or others without full payment in return, and state that OPG cannot approve a gift, only the court can. Attorneys may make occasional small gifts on customary occasions, which must be reasonable, affordable and in the person's best interests. Anything beyond that needs a formal application to the Court of Protection.
They cover gifts that go slightly beyond an attorney's authority but not far enough to need a court application, and the Office of the Public Guardian state they only apply if the person's estate is worth more than £325,000. They do not cover loans to the attorney or their family, investments in the attorney's business, sales or purchases below value, or any transaction where the attorney's interests conflict with the person's.
The Equity Release Council say it is helpful to have powers of attorney in place, and note this especially if you are considering a lifetime mortgage with a drawdown facility, where money may be taken in stages over many years. Having one and never needing it is a considerably better position than needing one and not having it.
Equity release may involve a lifetime mortgage, secured against your property, or a home reversion plan. It will reduce the value of your estate and impact funding long-term care.
One qualified equity release adviser. They will go through your figures and tell you if there is a better answer. It costs nothing and commits you to nothing.
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