We have a client with Altzheimers
Some time ago, his wife set up an enduring power of attorney in preparation for the day when she would be needed to sign documents (ie tax returns) on his behalf.
His condition has deteriorated to the point at which she felt it necessary to execute/activate (or whatever the term is) this power, and she now has the authority to sign his tax returns.
However he continues to have periods of lucidity and apparent full cognitive ability, intersperced with periods of mental incapacity. During those (lucid) periods he prefers to sign documents in his own name.
Do those signatures have any legal force, or do we have to insist on the wife's signature on tax returns now?
Thanks for any input.
With kind regards
Clint Westwood
Replies (10)
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Lasting Power of Attorney: Finance
I took out a LPoA in the last couple of years for a relative. It was activated straight away. It is important that when acting for the person under the LPoA you must always consider the person's wishes and act accordingly in their best interest. If you judge that they are capable of making a decision for themselves and understanding the implications it is perfectly right and proper that you adhere to their request and allow them to do just that on that occasion. You only step in and use your power when they are not capable of doing so.
In the case you mention the wife must consider whether the husband understands the tax return he is being asked to sign. If he is fully aware of what he is doing because this is a "good" day then it is perfectly correct and proper that he should sign the return himself. I advise that the wife and yourself both be present and you make a note for your file of how the situation was judged.
I was ambiguous, sorry
I meant 'No you do not have to insist on the wife's signature ' As sqay has said you can take a view on the day but should keep a note as to the decision made and why.
not an expert, but ...
... surely if you have a letter from a medical practitioner saying X is not mentally capable, then you can rely on the attorney's signature? Or despite such a medical written assessment, do you have to nevertheless assess their lucidity case-by-case? I recall a solicitor doing this for an elderly relative of mind - "Who is the Prime Minister?", "What day is it?" etc. Sounds like you should consider charging extra for the extra work.
power of attorney
The real question is not whether there is a valid power of attorney, general, specific, or enduring.
The fact is that a tax return nowadays counts as "Sworn legal document". In these unfortunate cases (Been there worn the T-shirt) you should ask (explaining why) for an opinion from the client's medical practitioner. If in the practitioner's written opinion the patient has lost the ability to safely understand financial and or legal documents, relying on the signature from that point on is unsafe in law, including Revenue law. Do not rely on inexpert opinion. Any of us who have had a relative in this sad state may confirm that it is unsafe to relay on what appears to be the case.
If the accountant advises HMRC of the situation, then HMRC will be reasonable and accept the "Accountant as agent"'s "to the best of my belief" certification on the returns. What it does require is that the accountant holds his appointment from whoever has the power of attorney. Be careful the Power of attorney must be in the correct format, and have been signed by the taxpayer at a time when he or she still understood the implications. If this is not possible, it is better to submit an unsigned return to HMRC explaining the circumstances. This is not unusual. Insolvency practitioners often submit returns completed by them, but unsigned.
In truth, in these difficult circumstances, the putatitive personal representative should always obtain clear independent legal advice. Dealing with persons in the early stages of Dementia is hard enough emotionally, never mind HMRC stuff.
I believe yes
I blieve that yes the return must be signed by the attorney. A cheque is invalid if signed by your client so why would a tax return not be.
Chq is not invalid
Unless attorney has told bank not to accept his signature.
In this case I would probably discuss the return with H obtain his approval if lucid as a matter of courtesy, however I would include W in discussion or review seperatly with her and obtain her approval as attorney. I would rely on the W signature if push came to shove.
Bank
The bank will stop the original signature been able to sign a cheque when the attorney registers with them.
A determination of regained capacity can be made if your client regains capacity.
just by the way ...
HSBC honoured countless cheques written and signed by a client's adult child but drawn on the client's bank account over a couple of years even though the bank didn't have a POA on file. All above board, not a defalcation, but just shows how little banks look at cheques. The adult child signed her married name on the parent's cheques. So signed "Susan Smith" above "John Bloggs", so it was very obvious to anyone who looked.