The Mental Capacity Act 2005 provides a comprehensive code to empower and protect people who lack capacity to make decisions for themselves. Its implementation is increasingly required by our ageing population whose decline is, all too frequently, accompanied by impaired capacity.
With an increasing awareness of dementia, with all its attendant difficulties, many people as they approach retirement grant a Lasting Power of Attorney to their selected Attorney, usually their spouse or partner, children or trusted friends. It is a document by which a person (the “Donor”) confers power on another (the “Attorney) to act on their behalf in connection with their finances and property and/or their health and welfare. Of course, the Donor can continue to handle their affairs despite the existence of this document if the LPA is worded correctly preventing its use until the Donor is either physically or mentally incapable as certified by a medical practitioner.
There is also an increasing trend for younger people to put in place this form of “safety net”. Their motivation in such cases is usually triggered not solely by concern about future frailty and incapacity in old age but also concern that a road accident or stroke may leave them incapacitated. The existence of a LPA enables the Attorney to manage the Donor’s finances easily to include by accessing their bank account, and so much more, such as applying for benefits, dealing with pensions and taxation issues.
Often, when the question of future management of a client’s affairs is raised should they be unable to manage their affairs, the mistaken reply is “I do not need to worry, my children will sort this out”! So what does happen when there has been no such forward planning, and there is a decline into dementia or a tragic road accident resulting in brain injury or the unexpected stroke and there is no LPA in place? This is when the Court of Protection will come into play.
What is the Court of Protection?
This is the specialist Court dealing with all issues relating to people who lack capacity to make specific decisions. The Court can appoint a Deputy under the Mental Capacity Act to make ongoing decisions on behalf of such an individual in relation either to their finance and property or their personal health and welfare. The Deputy must be at least 18 years old and have sufficient skills to take on this role. The Deputy can be a family member, or frequently as the family may already be struggling with the emotional stress, a professional Deputy can be appointed.
A formal application will be required to the Court of Protection detailing the incapacitated person’s family and property together with a medical opinion on their capacity and a declaration by the Deputy of their suitability to act. Inevitably there is a Court fee to be paid, currently £400.
The process of obtaining an Order appointing a Deputy is not a speedy one. Potentially there is a wait of at least 16 weeks before a decision is received. Although an application to the Court of Protection for an Order is the only option at this stage, it is not a speedy one nor is it simple or cheap.
In addition to the initial Court fee, the Court requires that all Deputies appointed to manage a person’s property and finances arrange a security bond with an insurer. This is a type of “insurance policy” designed to financially protect the person who lacks capacity in the unlikely event that the Deputy were to mis-manage their finances. The premium for the bond, which can be significant, must be paid before the Court releases the sealed Orders. In addition, the Deputy will be responsible for filing accounts to the Court and will be under the supervision of the Court.
It is essential for those declining to make a Lasting Power of Attorney to understand the workings of the Court of Protection should they not put in place such a “safety net”. Your future life and the lives of those you love, can be managed and the quality of those lives maintained easily under the terms of an LPA once capacity is lost, thereby avoiding the complexity and expense of the Court of Protection.
Ursula Watt, Head of Private Client
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