It was never intended that the donor of an enduring power of attorney should be able to delegate his or her functions as a trustee.

For this reason section 2(8) of the Enduring Powers of Attorney Act 1985 specifically provides that 'a power of attorney under section 25 of the Trustee Act 1925 (power to delegate trusts, etcetera by power of attorney) cannot be an enduring power'.However, while the Enduring Powers of Attorney Bill was before Parliament, a decision was made in Walia v Michael Naughton Ltd [1985] 1 WLR 1115, which had a profound impact on the legislation that was eventually enacted.In Walia it was held that a general power of attorney in the form specified in section 10(1) of the Powers of Attorney Act 1971 was insufficient for the purpose of delegating the donor's functions as a trustee of land he owned jointly with others.

For that purpose a delegation pursuant to section 25 of the Trustee Act 1925 was required.The then Lord Chancellor, Lord Hailsham, was concerned that this decision might prejudice the efficacy of the proposed enduring powers scheme, particularly in the context of jointly-owned matrimonial homes.

Accordingly, a clause, which was later to become section 3(3) of the Enduring Powers of Attorney Act, was hastily drafted enabling an attorney under an enduring power to exercise all or any of the trusts, powers or discretions vested in the donor as trustee.Even before the Act came into force section 3(3) came under fire.

There was a particularly scathing, but perfectly reasoned, attack by Richard Oerton in an article, Trustees and the Enduring Powers of Attorney Act 1985: a Legislative Blunder, published in the Solicitors Journal on 10 January 1986.The problem with section 3(3) is that:-- it provides none of the safeguards for beneficiaries that are required under section 25 of the Trustee Act;-- the delegation remains operative after the donor has become mentally incapacitated;-- it applies automatically and can occur inadvertently; and-- there is statutory duplication with section 25 of the Trustee Act.In January 1994, the Law Commission published a report, The Law of Trus ts: Delegation by Individual Trustees, recommending that there be two separate regimes: a special one for the delegation of trustee functions where the donor has a beneficial interest in the property; and a general scheme for all other trusts.The report contained a draft Trustee Delegation Bill which was introduced in the House of Lords in December 1998.

The Trustee Delegation Act 1999 received the Royal Assent in July 1999 and came into force on 1 March 2000.

It extends to England and Wales only.

The numbers and headings in this article are the same as the section numbers and headings in the Act.Exercise of trustee functions by attorneyThe general rule is that any trustee functions delegated to an attorney (whether under an ordinary power or an enduring power) must comply with the provisions of section 25 of the Trustee Act 1925, as amended (see 5 below).However, section 1(1) of the 1999 Act provides an exception to this general rule.

An attorney can exercise a trustee function of the donor if it relates to land, or the capital proceeds or income from land, in which the donor has a beneficial interest.Evidence of beneficial interestClearly, anyone purchasing from an attorney needs to be satisfied that the donor has a beneficial interest in the property.

Accordingly, section 2 provides that an 'appropriate statement', made by the attorney at the time of the sale or up to three months thereafter, confirming that the donor had a beneficial interest in the property, shall be conclusive evidence.

Land Registry Practice Leaflet 32 contains a precedent.General powers in specified formSection 3 relates to ordinary (non-enduring) powers of attorney.

It provides that an attorney, acting under a general power in the form specified by section 10 of the Powers of Attorney Act 1971, may exercise the trustee functions of the donor in relation to land, etcetera, in which the donor has a beneficial interest.

In effect, it is a statutory reversal of the decision in Walia v Michael Naughton Ltd.Enduring powersSection 4 affects enduring powers of attorney, including some that are already in existence.

The Act repeals section 3(3) of the Enduring Powers of Attorney Act 1985, subject to the following transitional provisions:-- s 3(3) does not apply to any enduring power created after 1 March 2000, the date on which the 1999 Act came into force.-- s 3(3) will cease to apply to an existing registered enduring power if and when the registration is cancelled.-- s 3(3) will cease to apply to an enduring power created before 1 March 2000, in respect of which a successful application to register is made before 1 March 2001, if and when the registration is cancelled.-- s 3(3) will cease to apply to an enduring power created before 1 March 2000, in respect of which an unsuccessful application to register is made before 1 March 2001, when the application to register the power is refused.-- in all other cases, s 3(3) will cease to apply on 1 March 2001 to any enduring power of attorney created before 1 March 2000 in respect of which no application to register has been made by 1 March 2001.Where section 3(3) does not apply, or when it ceases to apply, section 1(1) of the 1999 Act will apply instead.There is no need for a new prescribed form of enduring power of attorney in consequence of the Act.

Paragraph 4 of the explanatory information, 'Part A: About using this form', in the current (1990) prescribed form states: 'If you are a trustee (and please remember that co-ownership of a house involves trusteeship), you should seek legal a dvice if you want your attorney(s) to act as a trustee on your behalf.' This recommendation applies both before and after the Act comes into force, although, of course, the legal advice given will be different.Amendments to section 25 of the Trustee Act 1925In future any delegation of trustee functions (other than in respect of land, etcetera, in which the donor has a beneficial interest) must comply with the provisions of section 25 of the Trustee Act 1925, which contains a number of safeguards to protect the beneficiaries.In brief, these safeguards are that a trustee:-- may, by a power of attorney, delegate his or her functions as trustee for a period of 12 months or any shorter period;-- must -- either before or within seven days after giving the power of attorney -- give notice to the co-trustee(s) and any person entitled to appoint a new trustee; and-- is liable for the acts/defaults of the attorney.In its unamended form, section 25 provided that the donee of a power of attorney could not (unless a trust corporation) be the only other co-trustee of the donor.

Section 5(4) of the 1999 Act, however, removes this prohibition.

The desired objective of involving at least two persons at the relevant time is now covered by section 7 of the 1999 Act instead.Section 5(6) specifies the form of power of attorney to be used for the delegation of trustee functions.

Unlike an enduring power, it is not a prescribed form, the use of which is mandatory.

Like a general power under the 1971 Act, it may be either in the form specified or in a form to the like effect.Section 25 powers as enduring powersSection 6 repeals section 2(8) of the Enduring Powers of Attorney Act 1985: the section which said that a power of attorney granted under section 25 of the Trustee Act 1925 cannot be an enduring power.This means that a donor can use an enduring power of attorney to delegate trustee functions under section 25 after 1 March 2000.

However, the requirements of the amended section 25 (such as duration, notice and wording) will apply to such a delegation.Two-trustee rulesSections 7, 8 and 9 contain a number of provisions about attorneys acting for trustees.The "two-trustee rules" provide that:-- capital monies arising from land must be paid to at least two trustees: Law of Property Act 1925, s 27(2); Settled Land Act 1925, ss 18(1)(c) and 94(1);-- a valid receipt for such capital monies must be given otherwise than by a sole trustee: Trustee Act 1925, s 14(2); and-- a conveyance or deed must be made by at least two trustees to overreach any powers or interests affecting a legal estate in land: Law of Property Act 1925, s 2(1)(ii).Section 7 is designed to clarify and strengthen these rules by providing that they can be satisfied either by two people acting jointly in one capacity, or by two people acting in different capacities.Appointment of additional trustee by attorneySection 8 inserts some new subsections into section 36 of the Trustee Act 1925 and enables the attorney under an enduring power created after 1 March 2000, and subsequently registered, to appoint an additional trustee in order to satisfy the two-trustee rules.For example: Fred and Gwen jointly own their house.

They both appoint each other to be their sole attorney.

Fred becomes mentally incapacitated and Gwen registers the power.

She then wants to sell the house.

She can appoint her son to be an additional trustee.Attorney acting for incapable trusteeSection 22(2) of the Law of Property Act 1925 says that, if there is a trust of land, and the lan d is vested in an incapable trustee the incapable trustee must be discharged before the legal estate can be dealt with.Section 9 of the 1999 Act adds sub-section 22(3) which provides that the legal estate can be dealt with without the appointment of a new trustee, or the discharge of the incapable trustee, if there is an attorney under an enduring power who is authorised to act for the incapable trustee.SupplementarySection 10 provides that a reference to land includes any estate or interest in the land held by the donor.

Section 11 defines 'land' and 'enduring power of attorney' by reference to existing legislation.

Section 12 covers repeals, and Section 13 the commencement, extent and short title of the Act.