The loss of mental capacity through illness or an accident can be a very frightening and difficult time for both the individual losing their capacity and the family and friends around them. Not only do family and friends have to deal with the emotional aspect of this unfortunate situation, but they may also find themselves suddenly having to assist with managing that individual’s financial affairs in the future, if they are no longer able to do so themselves.
In such circumstances, we are frequently asked to advise on the effect that loss of capacity has on an individual’s day to day affairs.
The first thing to consider is whether the individual who is losing or has lost capacity has either an Enduring Power of Attorney (“EPA”) or a Lasting Power of Attorney (“LPA”) in place. An EPA or LPA is a powerful legal document which allows an individual to appoint one or more people (known as attorneys) to make decisions on behalf of the individual, if he or she later loses capacity.
Please see our previous articles dated 10 June 2020 and 6 November 2020 for a comprehensive summary on LPAs and how they work in practice, particularly during the current lockdown restrictions.
It is crucial to note that LPAs can only be made if the individual has full mental capacity and the ability to make their own decisions. Therefore, if an individual loses capacity without this document in place, the only option is to apply to the Court of Protection for a Deputyship Order.
The Court of Protection is the specialist Court in England and Wales which deals with all issues and applications in relation to individuals who lack capacity to make specific decisions for themselves. The Court has the power to make decisions and appoint a Deputy as follows.
What is a Deputyship Order?
A Deputyship Order gives the applicant the legal authority to make decisions and mange the affairs of an individual who has lost capacity, in the event they are unable to do so themselves. This is similar in nature to the LPA, the key difference being the applicant (the “Deputy”) can only be appointed by the Court after the individual has lost capacity where there is no LPA in place.
The Order made by the Court will set out the extent of the Deputy’s duties and powers along with any restrictions which may be imposed. There are two types of Deputy: Property and Finance Deputy; and Personal Welfare Deputy.
Property and Finance Deputy
This type of Order is used to give the appointed Deputy authority for dealing with property (including buying or selling property), managing bank or building society accounts, tax affairs, making and/or selling investments, and paying household or other day to day bills.
Personal Welfare Deputy
This allows a Deputy to make decisions about medical treatment, moving into a care home, or life-sustaining treatment. However, due to the complex nature of such decisions, the Court is much more reluctant to grant this type of Deputyship Order and will only do so if:
- There is a legitimate concern as to whether decisions will be made in the individual’s best interests, e.g. if there is a disagreement among the family regarding care;
- It is necessary for a long-term decision to be made on a specific issue e.g. if the individual needs long-term care either at home or in a care facility; or
- There is any other specific and complex decision regarding health and care which needs to be made on behalf of the individual who has lost capacity.
Who can become a Deputy?
It is possible for anyone over the age of 18 to apply to be a Deputy, but it is commonplace for immediate family or close friends to fulfil this role. If there is no suitable family or friend to apply, it is possible to appoint a professional Deputy such as a solicitor. However, professionals are usually only willing to act as Property and Finance Deputies and will not make decisions regarding care and medical treatment. In the rare circumstance where there is simply no one who can fulfil this role at all, the Court has the power to appoint a Panel Deputy (from a list of approved firms and charities) who has specialist experience in this regard.
Whoever is appointed as Deputy should be someone who has the appropriate skills and capability to manage the individual’s affairs and make key decisions. The fundamental principle is for all decisions to be made in the best interests of the person who has lost capacity, and to apply a high standard of care when making decisions. It is crucial to keep written records of all decisions made, liaise with any other Deputy (if more than one is appointed) before making decisions, and, of course, keep the finances separate from the Deputy’s. When becoming a Deputy, it is necessary to send an annual report to the Court explaining the decisions which have been made. A Deputy may also be visited by a Court of Protection officer to ensure that they are performing their duties and powers correctly, or for general supervision throughout the period of their Deputyship.
How to apply for a Deputyship Order
The process is initiated with a paper-based application to the Court of Protection. The applicant must provide a declaration informing the Court about their own personal and financial circumstances (to ensure they are trustworthy and capable of dealing with finances) and setting out how they intend to make decisions on behalf of the individual who has lost capacity. It is also a requirement to obtain a capacity assessment of the individual whose affairs will be managed by the appointed Deputy. This is usually completed by the individual’s GP or other medical professional with knowledge of their health and welfare. Enquiries must also be made into the individual’s income and asset position. These details need to be provided in the application process so that the Court is fully aware of what the Deputy will need to manage.
Once the relevant paperwork has been prepared and signed by all parties, it is then submitted to the Court for processing. The applicant must pay a Court application fee of £365 (for each type of application), an assessment fee of £100 for a new Deputy, and an annual supervision fee during the appointment, which ranges from £35 to £320. For Property and Finance, the Deputy may also have to set up a ‘security bond’ before they can be appointed. This is a type of insurance which protects the finances of the individual they are applying to be a Deputy for. This is a decision for the Court and does not apply in every case.
Please note, if engaging the professional services of a solicitor to prepare the application forms and all supporting evidence, the solicitor will also charge fees for their time in preparing the forms on the applicant’s behalf.
Once the application has been submitted to the Court, the application will be reviewed, and the Court will confirm if the application has been approved or rejected. If approved, the applicant must notify at least three other family members or friends of his or her intentions in order to provide accountability and give them the opportunity to object to the application (if they have concerns about the applicant’s intentions). If there are no objections, the Court will usually issue the Deputyship Order without needing a formal hearing to obtain further information. Typically, the whole process can take around three to six months, depending on how quickly the Court can manage this. Currently, there are delays due to the COVID pandemic, but if there are genuine grounds for an urgent application (e.g. a property sale), it can be expedited (usually for a further fee).
How can Seddons help?
All the members of the Private Client team at Seddons are highly approachable and will do their very best to help, whatever your circumstances. The team prides itself on providing a bespoke, personal service, complemented with technical expertise.
The information provided in this article is for general guidance purposes only and you should always seek professional legal advice before making an application to the Court of Protection for a Deputyship Order.
If you have any questions regarding this article or any other matter relating to your personal affairs, please get in touch with your existing Seddons’ Private Client contact, or the Head of Private Client, Stuart Crippin, at [email protected] or 020 7725 8056.