With an ageing population in the UK, a growing issue for many families is that of elderly relatives losing mental capacity, for example through dementia. In these difficult circumstances, the ability to deal with personal and financial affairs on their behalf, ensuring matters are dealt with in their best interest, becomes essential.
The Court of Protection and the Office of the Public Guardian help to protect the financial and property affairs of people who have lost mental capacity and can no longer deal with their own affairs.
The Court of Protection decides whether someone is mentally capable of managing their own affairs. If the Court believes that they can’t deal with their affairs any longer, it will appoint someone to act as a “Deputy”. This Deputy has the authority to manage that person’s property and financial affairs. However, the process of applying to the Court takes time and can be costly.
The Court will often make a general Order allowing the Deputy to manage all financial affairs such as bank accounts, investments, utility bills and the sale of any property which the incapacitated person may own in their sole name.
In a situation where two or more people own a house or land together they are referred to as the Trustees of that property. If one or more of those Trustees become incapable of managing their property and affairs, they will not be able to sign any legally binding documents dealing with the sale of the property. The Court of Protection won’t make an Order for the sale of a jointly owned property. If it is anticipated that such a property will need to be sold, a separate application must be made to the Court (under the Trustee Act 1925) for an Order appointing someone to replace the Trustee who lacks capacity. Only when the Court has appointed a new Trustee will it be possible for the property to be sold. In this situation two separate applications need to be made to the Court; the first for a general Order and the second, seeking an Order appointing new trustees to facilitate the property sale. As a result legal costs involved can increase.
Applications to the Court of Protection are sometimes necessary but in many situations could be avoided if the incapacitated person had previously made a Lasting Power of Attorney (LPA). An LPA would have enabled them to appoint a person of their choice to act on their behalf if they became incapable. A person making an LPA can choose who should act on their behalf, whereas an application to the Court for the appointment of a Deputy can be made by anyone – although in practice, a family member or perhaps a professional Deputy may be appointed.
The Court of Protection offers a solution when a person has become mentally incapable but it is far better to ensure that an LPA is made at a time when that person has full capacity. Having an LPA in place gives peace of mind with the knowledge that the appointed person is the most appropriate person by choice, and someone trustworthy. With a valid LPA in place an application to the Court of Protection can be avoided.
