Most of us take for granted that we have the ability to manage our own affairs...
...but should something happen, for example a stroke causing paralysis or an illness such as dementia, and that ability was diminished, the Court of Protection has the jurisdiction to make decisions on an affected person’s behalf or appoint a suitable person to do so.
What powers does it have?
The Court of Protection has the powers to:
- Decide whether a person has capacity to make a particular decision for themselves;
- Make declarations, decisions or orders on financial or welfare matters;
- Appoint deputies;
- Decide whether an Lasting Power of Attorney or Enduring Power of Attorney is valid;
- Remove deputies or attorneys who fail to carry out their duty;
- Hear cases concerning objections to register an LPA or EPA.
What does the Court of Protection actually do?
If a person is classed as incapable and unable to manage their financial affairs, any bank that holds monies for them will usually freeze their accounts. This is perfectly legal and correct and is done to prevent any third party from fraudulently operating the accounts. Or, if a person should need to move house or into residential care but is classed as mentally incapable, they are legally prevented from signing the legal paperwork in order to sell their property.
But once the Court of Protection has appointed a suitable other person called a “Deputy” to act on their behalf, that Deputy will be able to take control of their bank accounts and they will be unfrozen and they will also be able to take control of any properties or interests to enable their sale or other transaction in the best interest of the incapable person.
(The term “Deputy” replaces “Receiver” under the new terminology introduced by the Mental Capacity Act 2005. This statute also renamed the Public Guardianship Office as the Office of the Public Guardian (OPG). The Office of the Public Guardian works alongside the Court of Protection and carries out administrative and regulatory functions and supports the Court.)
If that person had at some time in the past made an Enduring Power of Attorney (EPA) or Lasting Power of Attorney (LPA), then the Attorney named in that document can begin to act on the person’s behalf. If that person has no EPA or LPA in place, they should take legal advice as to whether they are well enough to make a LPA. There is a strict legal test for ascertaining if a person has sufficient mental capacity to make a power of attorney. If your solicitor is unsure, they may ask for a doctor to make an assessment.
If a person does not have sufficient mental capacity to make a LPA, then a member of the family can make an application to the Court of Protection for authority to act on that person’s behalf with regard to their financial affairs. Where there is no family, a professional adviser such as a solicitor or the Local Authority may make this application instead. If successful, the applicant will be appointed as that person’s Deputy.
Once a Deputy is appointed, they will take control of the incapable person’s finances and property. Deputyship is an onerous role. The Deputy must always act in the incapable person’s best interests and comply with the Mental Capacity Act 2005 and related Code of Practice. The Deputy must keep accurate records of his dealings with their assets and income and submit an annual account to the OPG. There are three levels of supervision and the Court will set this. It is also necessary for the Deputy to take out an insurance policy to cover any negligent acts.
There are prescribed application forms which must be completed to begin a Deputyship application. Notice must be given to the person’s close relatives and any person with an interest in their welfare such as their unmarried partner or carer. These persons have a right to raise any concerns about the proposed Deputy’s suitability to act. The Court can refuse an application by someone they consider too elderly to act or someone who has a poor history of managing their own finances.
The legal fees for a Deputyship application are likely to run into a few thousand pounds depending on factors such as the number of interested parties who must be notified and whether any objections are raised. The process takes approximately six months depending on how busy the Court is. It is therefore important to consult a solicitor at an early stage if you suspect that a relative is becoming unable to manage their affairs.
It is possible for a Deputy to be appointed to make personal welfare decisions on an incapable person’s behalf, e.g. where they should live or what medical treatment they should receive. However, the Court will only appoint a Deputy in extremely limited circumstances such as where there is disagreement amongst family members/carers or where their medical condition means that treatment decisions must be made frequently. Laws exist (see Section 5 of the Mental Capacity Act 2005 and the Code of Practice) to authorise the person responsible for the incapable person’s care to make day-to-day personal welfare decisions on their behalf.
Aside from Deputyship decisions, applications can also be made by Attorneys or Deputies to the Court of Protection for permission to make gifts of the incapable person’s assets in order to save inheritance tax or for permission to make a Will on their behalf if they should lack the ability to do so.
To talk to someone, with no-obligation, who understands the practical issues mental incapacity brings and is experienced in dealing with them effectively and sensitively, please contact
John Rouse.
