Question
of the week
Question of the week

Curious. Interesting. Informative.

19 March 2021

Balancing act

Wills, Powers, Estates & Family Provision Claims
Federal

Asked

Powers of attorney - Severing joint tenancy

A client has an enduring power of attorney for their partner who has lost capacity. They own a property together as joint tenants. Can the joint tenancy be severed to be a tenancy in common other than in equal shares?

To do otherwise seems to be a breach of duty.

The power of attorney does not authorise the conferral of benefits on the attorney.

Answered

Thank you for the question.

It is correct that there would be a breach of duty if the split were made in the attorney’s favour. However, the tenancy could be split in favour of the partner as that would not be to the benefit of the attorney.

For discussion on severing joint tenancy where there is a power of attorney see Smith v Smith [2017] NSWSC 408. In particular see [318] where it is noted that it is customary for the shares in a joint tenancy to be severed into equal shares.

Regards

Mentor