What can you do when someone loses capacity?
Mike Bracegirdle, Partner at the Firm’s Gadbrook Park office, looks at how to overcome the problems faced by family or friends when someone is unable to deal with their affairs themselves.
For most individuals the loss of capacity will be a gradual process, often associated with ageing, and occurring over a lengthy period of time. On first step diagnosis, often made after attending a memory clinic at the local GP surgery, there is time to take legal advice and to execute a lasting power of attorney (LPA) which, if registered, is still valid despite the loss of capacity.
Lasting Powers of Attorney were introduced in 2007 to replace Enduring Powers of Attorney (EPA). They come in two distinct parts;
- Property and Financial Affairs – allowing the attorney to deal with financial and property matters; and
- Health and Welfare – allowing the attorney to make decisions in respect of health issues.
For any individuals that executed a EPA (Enduring Power of Attorney) before 2007 and have subsequently lost capacity the named Attorney needs to make an application to register the Enduring Power of Attorney with the Office of the Public Guardian.
What happens when someone loses their mental capacity and there is no lasting or enduring power of attorney in place?
What we are examining here is a situation whereby given if after a diagnosis has been made with a potential loss of capacity the individual client has failed to execute a Lasting Power of Attorney or alternatively the loss of capacity has been unexpected and sudden such as a result of an accident or an unexpected stroke.
It is useful to look at an example of incapacity on a step by step basis
- Day 1: David Smith aged 63 has multiple strokes.
- Day 4: David’s family are told that he will never fully recover.
- Day 9: All bank accounts with David’s name on are frozen, his wife is unable to sign or act on David’s behalf.
- The wife seeks legal advice and is advised that she will have to apply to the Court of Protection to get authority to act on her husbands behalf. She is given a cost estimate of between £2,000 and £3,000 and told that the application could take between 3 and 4 months.
David’s wife will have to instruct a firm of solicitors to make an application to the Court of Protection to be appointed David’s deputy.
In the meantime David’s wife is experiencing numerous difficulties; she cannot access their savings account, her income is restricted and she may be unable to discharge all the household bills.
David’s wife has to set up her own new bank account to ensure that her pension is paid into that account.
David’s business colleagues are unable to deal with his business affairs and if David was either a sole trader or in partnership difficulties may arise with the continuing financial efficiency of that business. Sadly David may become lose mobility as a result of which more appropriate accommodation maybe required, such as a bungalow or apartment.
An Application to the Court of Protection
How will the solicitor prepare the application to the Court of Protection?
- The solicitor will download the latest application forms;
- Arrangements will be made to see David’s wife to go through the application to ascertain and obtain full details of his financial position;
- Medical reports will be required, which may be both time consuming and an additional expense. This is to confirm whether or not David is likely to make a recovery and be able to make decisions for himself;
- Having made the application, the Court of Protection may well appoint David’s wife to be deputy but she will have to take out a guarantee bond to protect David’s assets against her mismanagement (there is an annual charge for this);
- The Court will advise David’s wife on what she can spend. She must keep detailed accounts and make regular reports to the Court. There will be additional fees for different reports and the Court requests.
The Mental Capacity Act 2005 is only a relatively new piece of Legislation. The trauma and considerable distress currently being expressed by thousands of people is expected to multiple over the continuing years unless they take advice now to execute Lasting Powers of Attorney.
These issues are only going to rise with the aging population.
For advice on Powers of Attorney’s or if you think you may need to make an application to the Court Of Protection, contact one of our private client team at your local office.