Managing Financial Affairs During Periods of Mental Incapacity. Christine Bunting Director - Hyphen Law

Transcription

1 Managing Financial Affairs During Periods of Mental Incapacity Christine Bunting Director - Hyphen Law

2 Today s Agenda Financial challenges for Tom and Kate. How could they have planned for these challenges? What are the options available to them now? Health and Welfare Issues Will making and mental incapacity

3 Planning Ahead How could Tom have prepared for his impaired capacity?

4 Lasting Power of Attorney

5 Lasting Power of Attorney (LPA) A legal document that lets you appoint one or more people to make decisions on your behalf: - You choose who will act as your attorney (s) You choose when they can act This gives you more control over who looks after your affairs if you have an accident or an illness and can t make decisions when they need to be made (you lack mental capacity ) There are two types of LPA you can choose to make one or both: - Health and welfare; Property and Financial affairs.

6 What Happens if Tom Doesn t Have an LPA? Tom hasn t made an LPA and he now lacks the capacity to make one; He is unable to manage his own financial affairs.

7 Challenges for Kate

8 Challenges for Kate Kate may encounter problems with accessing bank accounts, paying bills or speaking with financial institutions; An application must be made to the Court of Protection for the appointment of a Deputy to make decisions on Tom s behalf

9 The Court of Protection Appointed Deputy

10 Types of Deputy Health and Welfare. Property and Affairs.

11 Property and Affairs Deputyships

12 What is a Property and Affairs Deputy? A person appointed by the Court of Protection to manage Tom s property and finances whilst he is unable to manage them for himself. The Deputy will be able to make all the financial decisions that Tom would usually make. The Court of Protection will only appoint a Deputy if it is satisfied that Tom lacks the capacity to manage some or all of his property and affairs.

13 How is Capacity Determined? The Mental Capacity Act 2005 (MCA) provides the test for capacity. It is a two stage process

14 Stage One The First Stage of the Test :- Is there an impairment of or disturbance in the functioning of the person s mind or brain? And Is the impairment or disturbance sufficient that the person lacks the capacity to make that particular decision? If the answer to this is no, then there is a presumption that the person has capacity. If the answer is yes, then the next stage of the test must be followed.

15 Stage Two The second stage of the test (a functional test) dictates that :- A person is unable to make a decision if they cannot:- a) Understand the information relevant to the decision, b) Retain that information in their mind [for long enough]; c) Use or weigh up that information as part of the process of making the decision; and d) Communicate their decision (whether by talking, using sign language or any other means).

16 The Capacity Journey

17 How is the Deputy Appointed?

18 How is the Deputy Appointed? An application is made to the Court of Protection. Usually without a court hearing A capacity assessment is undertaken in accordance with the Mental Capacity Act 2005 (MCA) and a capacity report (COP3)accompanies the application. Certain people are entitled to be notified Tom Tom s family

19 Who Can and Should Act as a Deputy?

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22 Who Can and Should Act as a Deputy? Lay Deputy usually a family member Could be Kate but beware of the demands and levels of responsibility that the job brings. Professional Deputy - usually a lawyer Particularly important when there are significant or complex assets. Joint Deputyships Spouse and a Professional.

23 The Court Order Name of the Deputy. Length of their appointment. Extent of their powers. Any limitations. The level of Security Bond. Frequency of accounting usually annual. Basis of remuneration.

24 How is the Deputy Paid? Professional deputies: - - Fixed costs - a yearly amount set by the court - Assessed costs file goes to the court with a draft bill The projected costs for a professional Deputy are usually included within a claim for damages. Lay deputies: - Can claim out of pocket expenses only. - Are paid from the Deputyship bank account and details are included in their annual report to the Public Guardian who oversees their actions.

25 Is a Deputy Always Necessary? If Tom had no finances or property to manage, & no prospect of being compensated for his injury and only in receipt of state benefits - a DWP Appointee arrangement would be more suitable.

26 What Does a Deputy Do? Practical Examples

27 The Role and Responsibilities of the Deputy Buy and sell property and arrange for property adaptations. Enter into and terminate tenancy agreements. Purchase equipment and anything else needed for Tom s day to day needs. Appoint a case manager where appropriate. Employ care teams. Fund agency care. Arrange pensions for employees auto enrolment. Employ treating therapists.

28 The Role and Responsibilities of the Deputy Manage and pay all household outgoings. - Utilities - Insurance Apply for state benefits. Apply for statutory funding from the Local Authority or NHS. File tax returns, pay tax which is due or claim refunds. Keep records of income and expenditure. Provide yearly reports to the Office of Public Guardian. Employ and work with a financial advisor.

29 The Role and Responsibilities of the Deputy Make regular payments to Tom if he can manage some funds. Relationship protection obtain Court approval to Prenuptial and Cohabitation agreements Make additional applications to the Court And more

30 Good Working Practices What can you expect of the Deputy? Deputyship Standards:- ata/file/504356/sd5-deputy-standards-professional-deputies.pdf Supervision The role of the Public Guardian and the Court Visitor

31 Decision Making Within a Deputyship The Deputy must allow Tom to make the decisions he is capable of making. If the Deputy is making a decision they still have a duty to consult with Tom if that is possible and have regard to his wishes and beliefs if he is able to express them. If Tom is unable to make or contribute to decisions the Deputy should consult with relevant others. All decisions made by the Deputy must be in Tom s best interests.

32 The Capacity Journey

33 Making a Best Interests Decision If an individual lacks capacity then a best interests decision will need to be made on their behalf. MCA Code of Practice provides guidance on best interests decision making:- Avoid discrimination Identify all relevant circumstances Assess whether person may regain capacity and whether appropriate to wait Encourage participation Consult others Consider individual s past and present wishes Keep clear records What about life sustaining treatment? What to do in a dispute application to Court of Protection

34 Health and Welfare Decisions for People Lacking Capacity

35 Health and Welfare Decisions Within the Court of Protection The Court will expect those caring for Tom to have exhausted all other means of decision making before asking for it s assistance. The Court is there as a last resort to provide:- Health and Welfare Declarations Health and Welfare Deputyships - Rare

36 Pub Quiz 2!

37 What s the Connection?

38 I m Never Going to Die! Statistics show that more than 60% of the UK population don t have a Will despite the fact that there is nothing more certain than death and taxes.

39 Wills 73% of 16 to 54 year olds don t have a Will. 64% of people aged over 55 do have one. In 2013, 8 million went to the government because people died without a Will. Source: Law Society October 2014

40 Wills Does Tom have the capacity to make a Will? Capacity assessment Banks v- Goodfellow test

41 The Test in: - Banks -v- Goodfellow Tom needs to (1) Understand the nature of the act of making a Will and its effects; (2) Understand the extent of the property which he is able to Will (3) Be able to comprehend and appreciate the claims of others to which he ought to give effect, and (4) That no insane delusions shall influence his mind in disposing of his property and bring about a disposal of it which if his mind had been sound, would not have been made.

42 If Tom Lacks Testamentary Capacity Statutory Will applications. Involvement of the Official Solicitor/Others.

43 Christine Bunting Director t: m: Hyphen Law is a trading style of nhlex Limited, a limited company registered number in England & Wales, authorised and regulated by the Solicitors Regulation Authority under registration number A list of directors (known as Partners) is available at its registered office: 6 Drakes Meadow, Penny Lane, Swindon SN3 3LL