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

Hodge Jones & Allen: Powers of Attorney

A Power of Attorney is a legal document where one person gives another person (the Attorney) authority to make certain decisions on his or her behalf.  The person appointing the Attorney is known as the Donor.  Powers of Attorney can be drawn up if the Donor has sufficient mental capacity to understand the nature of the deed but needs assistance with the management of their financial affairs, possibly due to a physical disability.

The authority given by general Power of Attorney comes to an end if the Donor loses mental capacity.  However, a Lasting Power of Attorney (LPA) will continue to be valid even after the Donor has lost mental capacity.

Anyone can make an LPA if they can understand what the LPA is and what the LPA will do.  They can also subsequently revoke the LPA but only while they are still mentally capable.

In addition to making a Will, many people draw up an LPA appointing a spouse or a family member to manage their financial affairs for them should they lose physical or mental capacity in the future.

LPAs are also drawn up with the intention that they should be used immediately.  This may be because the client has become too ill or frail to manage their own financial affairs. 

Types of LPAs

There are two types of LPAs:

• A property and affairs LPA, which allows your attorney authority to deal with your property and finances for you.
• A health and welfare LPA, which allows your attorney to make decisions about medical treatment, where you live and how you are cared for on your behalf, only when you lack mental capacity to do so yourself.  This could also extend, if you wish, to giving or refusing consent to the continuation of life sustaining treatment

What happens if you have not made a LPA or EPA?

If you lack capacity to make a financial decision, then it may be necessary for an application to be made to the Court of Protection for an appropriate order, such as appointing another person to make decisions on your behalf.  This is both costly and time consuming.

Most care and treatment decisions can be made on your behalf without the need for a court application.  However, if you wish to avoid potential disputes, you can give a person(s) authority to make those decisions on your behalf by making a health and welfare LPA.

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

Hodge Jones & Allen: Civil Partnership into Marriage – what about my Will?

A will is a very necessary precaution for a marriage or civil partnership. It is important to plan ahead and think about the future. Who will cater for your children? Who will get your prized possessions? Who will get the dog? (If you have one).

The law is constantly evolving and planning ahead is crucial! Not many people are aware that marriage can revoke an existing will! In 2004, the Civil Partnership Act saw that a civil partnership could also revoke an existing will. However not to worry, if you have already made a will in contemplation of your marriage or civil partnership then you are covered according to the Wills Act 1837.

Now here is where it gets interesting. You may ask what impact does the MSSCA 2013 have on existing wills?

A new piece of legislation, The Marriage (Same Sex Couples) Act 2013 received royal assent on 17 July 2013 and comes into force on 10 December 2014. Under the law of England and Wales, civil partnerships will be able to be converted into marriages. This sparked debate amongst practitioners as it was unclear whether the conversion to a marriage would revoke any existing wills the couples had in place.

Luckily, Section 11 of the Marriage (Same Sex Couples) Act 2013 provides that certain ‘private legal instruments’ are not affected by a same sex marriage and the first such ‘private legal instrument’ referred to is an existing Will.  

So the answer is no you will not have to make a new Will if you convert your Civil Partnership into full marriage under the new Act.

The law is constantly evolving, so remember to review your wills.

Yousafa Hazara

Solicitor

Hodge Jones & Allen

yhazara@hja.net                    

Tel. 020 7874 8300    

Hodge Jones & Allen: I have received damages from a personal injury claim, will it affect my benefits?

The short answer is potentially yes, if you are on “means” tested benefit. This is where the DWP or Local Authority assess how much money you have in order to determine your eligibility for certain benefits.

Examples of means tested benefit for now are as follows: (remember the whole system is being reviewed so just be weary of the upcoming changes)

• Housing Benefit
• Council Tax Benefit
• Income Support
• Tax Credits
• Employment Support Allowance
• Local Authority care and support

Compensation from an injury claim is disregarded for one year. After that, most benefits start to be reduced if you have capital of £6,000 or more. If you have over £16,000 then the likelihood is that you would lose all means tested benefits. So, plan ahead and save yourself with any potential problems.

The receipt of a personal injury award is intended to compensate you for your injury. So, what can you do to protect your benefits? Well, you can create a Personal Injury Trust. The trust will look after your award and can enable you to retain your benefits and any additional support you are entitled to. The DWP will then disregard your compensation money when you are assessed for means tested benefits. 

Don’t forget to act promptly. You have to set up the Trust within 52 weeks from the date that you receive any payment to compensate you for your injury.  That payment may be an interim or final payment from an insurance company. It is therefore important to act promptly if you know that a payment is due.

Even if you are not currently in receipt of means tested benefits or support it may still be beneficial to set up a trust in case your circumstances change.

And lastly, there are no restrictions or rules on how you spend your money. It is your money and you can spend it on anything you choose.

Yousafa Hazara

Solicitor

Hodge Jones & Allen

yhazara@hja.net