By Laura Edwards, Associate Solicitor
It is not uncommon to come across a situation where an elderly relative is no longer capable of managing their own financial affairs. If they have planned for this, there may be a Power of Attorney set up to enable an attorney to step in and act on their behalf. What can you do if no such Power of Attorney is in place?
Can the next of kin make decisions?
“Next of kin” is a common phrase but it has no legal standing in relation to financial decisions. If a relative loses mental capacity, the next of kin is unable to make financial decisions on their behalf unless they are an attorney or Deputy.
What is a Court appointed Deputy?
The Court of Protection is a specialist court that makes decisions about the finances and welfare of a person who lacks mental capacity. Capacity is not black and white. A person may have capacity to make some decisions and not others.
If medical evidence is produced to show that a person lacks capacity to manage their own financial affairs and there is no valid Power of Attorney in place, the Court has the power to appoint a Deputy. A Deputy can manage a person’s finances when they are unable to do so.
Who can be appointed as a Deputy?
Family or friends may apply to be a Deputy. Alternatively, a professional, such as a solicitor may apply. Each person’s affairs are different and whilst a family member may be the best choice as Deputy in some instances, they will not be. For example, if two family members have had a disagreement and both wish to be Deputy, the Court may instead choose to appoint a professional. Similarly, if a person’s financial affairs are complex, a professional deputy may be more appropriate. The partners at Humphries Kirk act as professional Deputies if required.
Can a Property and Financial Affairs Deputy make Health and Welfare decisions?
Generally no Property and Financial Affairs Deputies can make financial decisions, such as paying a care fees bill, but they cannot necessarily decide which care home a person resides in. There are grey areas that impact on health and financial matters, such as claims for NHS Continuing Healthcare Funding. In these instances, a Property and Financial Affairs Deputy may become involved.
If you are unsure whether you have the power to make a decision, it is always advisable to seek legal advice. It is possible to make a one-off application to the Court of Protection on a health and welfare issue. If lots of decisions need to be made, the Court of Protection may appoint a Health and Welfare Deputy, although this is rare.
Can a Deputy make gifts?
A Deputy’s powers will often include the ability to make small gifts on customary occasions and continue with donations to charities. However, larger gifts require the permission of the Court and a separate application needs to be made.
How long does it take to apply?
On average, an application takes 6-8 months. Urgent applications can be made in limited circumstances.
What is the Security Bond?
The Court requires every Deputy to arrange a Security Bond through an approved insurer. This protects the individual who has lost capacity in the event that the Deputy misappropriates their funds and also provides protection to the Deputy.
Who pays for the Court application?
The legal fees and court fees are recoverable from the person who lacks capacity.
What about supervision?
The Office of the Public Guardian supervises Deputies and requires an annual report to be submitted. A Deputy can pay a professional to prepare this Report.
Can a Deputy change a Will?
No, the Deputyship Order does not give the power to change a person’s Will. An application for a Statutory Will needs to be made to the Court.