Few situations are more difficult than realising that a loved one is no longer able to make decisions for themselves. Whether caused by dementia, a brain injury, a stroke, or another medical condition, the loss of mental capacity can leave families uncertain about what they can and cannot do to help.
Understanding the legal position and planning ahead can make a significant difference for both the individual concerned and their family.
What Does “Losing Capacity” Mean?
A person is considered to lack mental capacity if they are unable to make a particular decision for themselves because of an impairment or disturbance in the functioning of their mind or brain.
Importantly, capacity is decision-specific. A person may still be capable of making some decisions while being unable to make others.
For example, someone may be able to decide what they would like for lunch but may no longer be able to understand and manage complex financial matters.
The Importance of Lasting Powers of Attorney
The most effective way to prepare for a potential loss of capacity is to put in place a Lasting Power of Attorney (LPA).
An LPA allows an individual (known as the Donor) to appoint one or more trusted people (known as Attorneys) to make decisions on their behalf if they become unable to do so themselves.
There are two types of LPA:
1. Property and Financial Affairs LPA
This allows Attorneys to deal with matters such as:
- Managing bank accounts.
- Paying bills and household expenses.
- Buying or selling property.
- Managing investments.
- Liaising with financial institutions.
2. Health and Welfare LPA
This allows Attorneys to make decisions relating to:
- Medical treatment.
- Care arrangements.
- Daily living needs.
- Moving into residential care.
- Life-sustaining treatment decisions (if authority is granted).
Having LPAs in place can provide significant peace of mind and often avoids lengthy and expensive Court applications later.
What if there is no Lasting Power of Attorney?
Many families only discover the importance of LPAs when it is already too late to put them in place.
If an individual has already lost capacity and does not have a Lasting Power of Attorney, family members do not automatically have legal authority to step in and manage their affairs. This is a common misconception.
Without a valid LPA, it may be necessary to apply to the Court of Protection for authority to act on behalf of the person who lacks capacity.
The Court of Protection is a specialist court in England and Wales that makes decisions or appoints deputies for people who lack mental capacity.
What is a Deputyship Order?
A Deputyship Order is a Court Order appointing an individual to make decisions on behalf of someone who no longer has capacity to do so themselves.
Applications are made to the Court of Protection and typically require evidence from a medical professional confirming that the individual lacks capacity. The application process also involves notifying certain family members and paying the relevant Court fees.
Deputyship applications are commonly required where there is a need to:
- Access and manage bank accounts.
- Pay household expenses and care fees.
- Manage investments.
- Sell or deal with property.
- Attend to ongoing financial matters.
Whilst a Deputy performs a similar role to an Attorney, the process is generally more time-consuming, expensive and administratively burdensome than putting an LPA in place during a person’s lifetime. Deputies are also subject to ongoing supervision by the Court of Protection.
For this reason, a Deputyship application is often viewed as a solution of last resort where no Lasting Power of Attorney exists.
Can you still set up an LPA after a diagnosis?
A medical diagnosis does not automatically mean that an individual is unable to make a Lasting Power of Attorney. Many people remain perfectly capable of understanding and executing an LPA, even where they have experienced changes in their health or cognitive abilities, but it is important to act quickly before capacity deteriorates further.
How we can help
If you are concerned that a loved one is beginning to lose capacity, or if a family member has already lost capacity without having made a Lasting Power of Attorney, it is important to seek advice as soon as possible.
Many people appreciate the importance of making a Will, but fewer recognise the importance of planning for lifetime incapacity. A Lasting Power of Attorney can be just as important as a Will and, in many cases, may become relevant much sooner.
Our Private Wealth and Inheritance team can advise on Lasting Powers of Attorney, Deputyship applications, and the practical steps that can be taken to protect vulnerable individuals and their assets. We provide clear, practical guidance to help families navigate what can often be a challenging and emotional time.
If you would like to discuss your circumstances, please contact us to speak to a member of our team.
