Hodge Jones & Allen: Managing the finances of someone who has lost mental capacity

If you want to assist someone with their financial affairs, and that person does not have sufficient mental capacity to understand legal documents, then you must apply to the Court of Protection to be appointed as a Deputy.

This may apply if you want to assist a vulnerable adult with learning difficulties or mental health problems, someone who has sustained a brain injury or an elderly relative with dementia.  In the following paragraphs, this person is described as the vulnerable person.

The application to appoint a deputy involves completing a number of forms as follows:

1. the application form which sets out the issue to be decided by the court and the terms of the requested order
2. an additional form setting out a lot of information about the vulnerable person’s current circumstances, closest friends and family and details of all their assets
3. a form to be completed by the proposed deputy showing that they are a suitable and competent person to take on the role of deputy.

It is also necessary to submit evidence to the Court that the vulnerable person lacks mental capacity to manage their own financial affairs.

In most cases there is a court fee of £400 to pay when applying to appoint a deputy.

 Once a Deputyship application has been issued by the Court, notices must be served on the people closest to the vulnerable person advising them that an application to appoint a deputy is being made.  They then have an opportunity to raise objections to the appointment.  If they do not respond within 6 weeks, the Court can proceed to make the deputyship order.

 The vulnerable person must also be served with notice of the issued application and given an opportunity to take part in the proceedings.

Once the order is made, the vulnerable person must be notified of the terms of the order.  It is also a requirement for the deputy to take out an insurance policy to cover any losses arising from their fraud or negligence.

The terms of the order set out the limits of the deputy’s powers. It is sometimes necessary to go back to the Court to request authority for specific transactions such as selling the vulnerable person’s property.

The deputy must always act in the best interest of the vulnerable person and must keep records of all the financial transactions they undertake on behalf of the vulnerable person. The deputy is supervised by the office of the Public Guardian (OPG) and must file a report and accounts with the OPG each year.

To discuss any issues relating to deputyship and Court of Protection please contact Philippa Barton at Hodge Jones & Allen on 020 7874 8300 or email pbarton@hja.net