Most people are keen to make a will to ensure that their estate is dealt with in line with their wishes once they are gone, however, there is a common theme of ignoring that same estate within the lifetime.
Too often, the phrases “I will do that later” or “I don’t need that yet” ring in the ears of private client lawyers, knowing full well the consequences of acting too late. Victoria Martyn is a paralegal at Wollens and looks at the issues;
It is a common misconception that the “next of kin” can make decisions for someone when they are unable to do so themselves and the truth is without the legal authority no one can manage a person’s property, finances, or welfare – not even your spouse or adult children.
Circumstances can change quickly and unexpectedly, at any point in someone’s life and no one knows what is just around the corner. What can be done to prepare for such an uncertain future and what happens if you find yourself with a loved one who has not put anything in place to protect themselves?
Powers of Attorney
Lasting powers of attorney (LPAs) are legal documents that you can create appointing one or more people to make decisions on your behalf when you are unable to do so. There are different types of powers of attorney that cover different aspects of your life such as property & finances, health & welfare, and business.
Creating a property & finance power of attorney, allows someone of your choice to be able to access your bank accounts, savings, and investments, deal with your property, pay your bills, and manage your day-to-day monetary affairs when you are unable to do so either physically or mentally. Without this authority, no one will be able to help, and bills may go unpaid, your property may fall into disrepair, and you may have no way of getting money for your basic needs.
A health and welfare power of attorney, gives the person or people of your choice the authority to make decisions on your behalf in relation to your health. These could be decisions about where you live, whether you should have a specific treatment, or how you should be cared for to best meet your needs. Of course, if you are able to make the decision for yourself, then you make it. A health and welfare attorney only steps in when you are unable to make a specific decision for yourself and should make this decision based on what you would have wanted.
By choosing to create powers of attorney, you are making sure that your life is in the hands of someone you trust and can count on if you are ever unable to manage things for yourself.
What if it is too late to create powers of attorney?
In order to create a power of attorney, you need to be able to understand what you are creating, who you are appointing, and what authority you are giving to someone. So, what happens if you find a family member or a friend in a situation with no powers of attorney in place, but they now lack the mental capacity to create them and they need help? What if there are bank accounts that no one can access, bills that aren’t getting paid, or care that needs funding? Who makes the decisions when no one has been given authority to do so? What can you do as a spouse, child or family member/friend to help?
Well, the answer to this depends on what decisions need to be made and normally means an application to the Court of Protection is necessary.
What is the Court of Protection?
The Court of Protection is a specialist court which can make decisions for those who lack the capacity to make decisions for themselves, also known as ‘P’. One of the decisions the court can make is to appoint someone to be a deputy for the person who lacks capacity.
Like powers of attorney, there are two kinds of deputyships that can be obtained by the Court of Protection – one for property and financial affairs and one for personal welfare. Property and finance deputyships are pretty routine, whereas general orders for personal welfare matters are rare. If there is no health and welfare attorney and the Court decides that a health and welfare deputy is not necessary, the decision-making power falls with social services and care/medical professionals.
There are many other decisions that the Court of Protection can make, such as allowing an attorney to make gifts from P’s money, considering putting a new will in place when P lacks testamentary capacity, replacing a trustee when P can no longer act in that capacity, or decisions for P that the relevant parties cannot agree on.
Applying for a deputyship
The process for making an application to appoint a deputy is involved and time-consuming. A collection of information and evidence must be obtained to support the application and even once submitted to the Court, it can take several months before an order is made.
It can be a tricky time navigating this interim period between finding out your loved one has lost capacity and finally getting the legal authority to sort things out for them. You will likely be involved in communications with a number of organisations such as care teams, banks, utility companies, etc. trying to manage the fallout of unpaid bills and no access to funds.
Once an order has been made, the deputy will receive a paper sealed copy from the Court which they can start using to manage P’s affairs. Much like the registered power of attorney document, this sealed court order will act as the deputy’s authority to access funds and liaise with certain companies.
Being a deputy
What is the difference between being a deputy and being an attorney? The roles are very similar and achieve the same purpose; the deputy can make decisions for P about a certain aspect or aspects of their life depending on the authority given within the order. For example, a financial deputy will be able to access P’s bank accounts, make decisions about their money and investments, or use their funds to pay for care and utilities, whereas a personal welfare deputy may make decisions about where P should live and what treatment they can have.
There are however a few differences between powers of attorney and deputyship of which it is important to be aware.
The first being the level of supervision. Once you are appointed as deputy you will be required to complete a detailed report every year that is submitted to the Office of the Public Guardian, the supervisory government body in charge with overseeing all attorneys and deputies, for review.
As a deputy, you will also be required to put in place a special insurance known as the deputy bond to protect P’s assets should you mismanage them, make certain promises to the Court that if broken can result in legal action being taken against you, and pay an annual supervision fee to the OPG.
A deputyship order can also be more restrictive than a power of attorney and the Court decides what the deputy is allowed to do on P’s behalf. If the Court does not grant the deputy a specific authority, such as permission to sell P’s property, then further evidence needs to be gathered and additional submissions made in order to obtain such authority.
What can we do to help?
We understand that when faced with a loved one who is struggling, it can be difficult to know where to turn and what to do first. We know that families are often pushed to sort things out just because they are the ones who turn up, and it is easy to lose sight of what is really important in these situations, which is being there for your loved one and enjoying the time you have with them whilst you can. The Court of Protection process can be extremely full on and stressful for families, not to mention difficult to navigate.
We have a specialist Care and Capacity team here at Wollens that would be happy to help and talk you through your options. Please contact us today for an initial no obligation chat on 01803 213 251 or email [email protected]
