Hello all!
A noteworthy point about the scope of POAs. My Mum, who passed away in 2015, owned a small number of shares worth about 3K. Despite preparing a draft Will some years earlier, she and my Dad didn't have a final version registered prior to her passing, so her estate passed to him by default. However, share ownership is a tad more involved. Some years later, with a POA in place for my Dad, I began the process of having the ownership of the shares transferred to him. After some back & forth with various forms, and initially receiving some incorrect info from the share management firm which held things up for a while, I discovered this week that the POA I have (both financial and welfare) is useless for sorting any of this out, so I thought I would post to explain why as the distinction may be relevant in other circumstances (mods, feel free to mention other exampes you can think of, and do correct me if I state anything here incorrectly). So this is what I was told today...
If my Dad still had capacity then he could in theory deal with this process himself, but the key point is that he isn't the registered owner of the shares, so what would be needed is either a Grant of Representation to specify who takes on the management of the remainder of my mother's estate (Probate), or a Trustee Power arrangement (normally just done via solicitor). In other words, my Dad would not be able to fill out all the usual share transfer forms himself (as I'd been trying to do) because he's not the owner of the shares, not unless he has the above additional authority to do so. Alas the people I originally talked to at the management company didn't know this either in regard to how it relates to having a POA. My Dad was deemed to have lost capacity about a year ago; I took on the task of trying to sort out the share ownership transfer without knowing about these ownership issues. Finally having it explained in detail today (by someone at the management company who actually knew the correct procedures), what it boils down to is this:
- Although a full POA allows one to act on behalf of a relative, one cannot use it to carry out some action which that person would not legally have been able to do themselves anyway, prior to their losing capacity.
With hindsight this sounds rather obvious, but the distinction is subtle. In general, when a person dies and there is no Will, then their estate passes to next of kin, typically their partner (if there is one). When it comes to share ownership though, it's much more complicated. Maybe it's doable if one has a financial POA in place and active but the person still has capacity (ie. welfare POA not yet active), but in general in the case of share ownership transfer it's probably best just to ask a solicitor to sort it all out (that will incur some extra fees, but still much easier overall).
Lessons:
1. Make sure a Will is in place, the shares are included and check with the solicitor that the provisions concerning the shares are correct.
2. If it's already too late, ie. the original share owner has passed away and there was no Will, then ask a solicitor to sort it all out.
As I say, one could in theory utilise a finance-only POA to assist the surviving partner to get the ownership transferred, but there are a lot of forms to deal with (some rather confusing, I had to call the management company several times to clarify how to fill them out), and such matters are probably the last thing they want to think about at the time.
Hope this helps! Perhaps not a common scenario, but I was intrigued to discover that the POA as a mechanism does have its limits.
Boromir.
A noteworthy point about the scope of POAs. My Mum, who passed away in 2015, owned a small number of shares worth about 3K. Despite preparing a draft Will some years earlier, she and my Dad didn't have a final version registered prior to her passing, so her estate passed to him by default. However, share ownership is a tad more involved. Some years later, with a POA in place for my Dad, I began the process of having the ownership of the shares transferred to him. After some back & forth with various forms, and initially receiving some incorrect info from the share management firm which held things up for a while, I discovered this week that the POA I have (both financial and welfare) is useless for sorting any of this out, so I thought I would post to explain why as the distinction may be relevant in other circumstances (mods, feel free to mention other exampes you can think of, and do correct me if I state anything here incorrectly). So this is what I was told today...
If my Dad still had capacity then he could in theory deal with this process himself, but the key point is that he isn't the registered owner of the shares, so what would be needed is either a Grant of Representation to specify who takes on the management of the remainder of my mother's estate (Probate), or a Trustee Power arrangement (normally just done via solicitor). In other words, my Dad would not be able to fill out all the usual share transfer forms himself (as I'd been trying to do) because he's not the owner of the shares, not unless he has the above additional authority to do so. Alas the people I originally talked to at the management company didn't know this either in regard to how it relates to having a POA. My Dad was deemed to have lost capacity about a year ago; I took on the task of trying to sort out the share ownership transfer without knowing about these ownership issues. Finally having it explained in detail today (by someone at the management company who actually knew the correct procedures), what it boils down to is this:
- Although a full POA allows one to act on behalf of a relative, one cannot use it to carry out some action which that person would not legally have been able to do themselves anyway, prior to their losing capacity.
With hindsight this sounds rather obvious, but the distinction is subtle. In general, when a person dies and there is no Will, then their estate passes to next of kin, typically their partner (if there is one). When it comes to share ownership though, it's much more complicated. Maybe it's doable if one has a financial POA in place and active but the person still has capacity (ie. welfare POA not yet active), but in general in the case of share ownership transfer it's probably best just to ask a solicitor to sort it all out (that will incur some extra fees, but still much easier overall).
Lessons:
1. Make sure a Will is in place, the shares are included and check with the solicitor that the provisions concerning the shares are correct.
2. If it's already too late, ie. the original share owner has passed away and there was no Will, then ask a solicitor to sort it all out.
As I say, one could in theory utilise a finance-only POA to assist the surviving partner to get the ownership transferred, but there are a lot of forms to deal with (some rather confusing, I had to call the management company several times to clarify how to fill them out), and such matters are probably the last thing they want to think about at the time.
Hope this helps! Perhaps not a common scenario, but I was intrigued to discover that the POA as a mechanism does have its limits.
Boromir.