Blog
If my mother moves into a care home, does she have to sell her house to fund her care if I’ve lived with her my whole life?
Anita Gill
The Mental Capacity Act 2005 is designed to protect and empower individuals who may lack the capacity to make their own decisions, whether those decisions relate to their legal affairs, care or something else.
The definition of capacity is complex because certain people can lack capacity to make some decisions, perhaps a complicated financial or legal decision, but may still have capacity to make other decisions, for example to decide what clothes to put on or what food to buy. It is a tricky concept to pin down because although there are certain conditions we may associate with a lack of capacity, including dementia or a severe learning disability, just because a person has one of these conditions does not necessarily mean they lack capacity. Dementia is a particularly interesting example because while people with dementia can be lucid and able to make a specific decision at a certain point, later that same day they may seem incapable of making that same decision.
Capacity must be assessed when establishing whether or not a person has the ability to make a Will, Lasting Power of Attorney or other legal document and is crucial in ensuring the validity of that document. For vulnerable clients such as those in extreme old age, or with dementia or severe learning disabilities this is something to be addressed at the outset of a matter, and experts may have to be consulted to report on whether the client has capacity to make the document they are seeking to create.
When a person has capacity, they have the option of making a Lasting Power of Attorney under which they can appoint an attorney to deal with their health and welfare or property and financial affairs in the event that they lose the capacity to do so themselves. This is the favourable approach, as the person is able to choose who will act as their attorney(s) at a stage where they still have the capacity to make that decision. In the event that a person loses capacity without having made an LPA, the Court of Protection will step in and a Deputy may be appointed to deal with the person who has lost capacity.
The existence of undue influence in situations where there is a question as to capacity is unfortunately not a rarity. Undue influence exists where a relationship between parties has been exploited by one party to gain an unfair advantage, for example somebody coercing an elderly relative into changing their Will in order to benefit themselves. In cases where capacity is in question, the possibility of undue influence having occurred or having the potential to occur is something that must be borne in mind.
In determining whether undue influence is present, a court will assess the quality of the interaction between the support person and the person being supported including signs of fear, aggression, threat, deception or manipulation. So undue influence is more than just persuasion, but it does not always manifest itself in some of the more extreme examples that may spring to mind, which is why it is a difficult concept to define and also why it is incredibly hard to prove. You might suspect undue influence if, for example, someone has made changes to a Will or other legal document that seems surprising or out of character, or not in keeping with a previous pattern or making substantial gifts in which again is not in keeping with a previous history of gifting beyond small gifts on birthdays, Christmas and the like.
With cases involving vulnerable clients whose capacity may be called into question, it is crucial to assess the risk of undue influence, which, by its nature, usually happens behind closed doors. Both those close to these individuals and those giving legal advice should be alive to the possibility that undue influence exists or is at risk of existing, and take steps to tackle this complicated but sadly prevalent area of the law.
If you are concerned about issues relating to capacity or undue influence, we would suggest seeking advice from a solicitor.
About the author
Anita Gill is a partner in our Private Client team specialising in Court of Protection work. Anita’s main role is acting as a professional deputy for individuals who have lost the capacity to make their own decisions and are no longer able to manage their property and financial affairs.
Latest blogs & news
#FreeBritney - How her sad case would never happen in the UK
Deputies are typically appointed because individuals cannot make decisions for themselves due to illness, like Alzheimers or dementia, old age or perhaps as a result of a catastrophic personal injury or medical negligence.
Financial Abuse – how to spot the signs
There are several reasons why someone may need the assistance of a financial deputy, stemming from incapacity due to an accident or a consequence of old age. There is however a darker side to this type of work that Court of Protection lawyers are seeing more and more of. This relates to those who have suffered some form of financial abuse and/or undue influence.
Managing compensation after a spinal injury
After a spinal injury the long-term impact on your life and that of your families can be significant. You may need a care package, a new home or adaptations to their existing accommodation, therapies and specialised equipment.
Death in the digital age – continuing your online life
The pandemic has changed the world – there is no doubt we are all “online” far more now than before. Social media now extends into every aspect of our lives, from those notorious repetitive baby pictures to those ‘should never have been posted university photos‘. We collect and share moments of our lives in the digital world.
Should I set up a joint lasting power of attorney for my mother?
In the latest edition of the Financial Times Money Q&A, Jemma Garside, senior associate in our private client team answers a question: "Should I set up a joint lasting power of attorney for my mother?"
I am an attorney – can I make gifts on behalf of a donor?
Subject to any restrictions or conditions in the Lasting Power of Attorney (“LPA”), a property and affairs attorney can make gifts on the donor’s behalf to the donor’s friends, family members or acquaintances on customary occasions.
Going through a divorce? Don’t forget to update your Will!
Going through a divorce process is stressful. There are lots of things to think about and one of these is likely to be what you should do to protect your hard-earned money.
I’m an attorney under a Lasting Power of Attorney – what happens next?
A donor must have the mental capacity to make a Lasting Power of Attorney (“LPA”) for property and affairs and health and care. The completed LPA is then sent to the Office of the Public Guardian (the “OPG”) for registration. Each page of the registered LPA will be stamped with ‘VALIDATED-OPG’.
Business LPAs - How to safeguard against a future incapacitated partner, director or shareholder?
As a business owner/shareholder, what would happen to your business if you were unable to make decisions – would someone be able to authorise payments or enter into contracts and keep the business running?
Lasting Powers of Attorneys for business and professional affairs
Lasting Powers of Attorney (LPAs) are vitally important documents. Our previous blogs have touched upon what LPAs are and top tips for anyone planning on putting an LPA in place. Most individuals should at least put in place a financial LPA to cover their home and personal finances. It is however a good idea in some cases to have a second financial LPA.
Don’t make an awful year even worse…Separation and Capital Gains tax
The last 12 months have put an awful lot of pressure on the family unit and sadly this has led to a spike in separation and divorce amongst married couples. With the end of the tax year fast approaching (last day Monday 5th April – Easter Monday) it is timely to consider the tax consequences of separations.
ACC Guidance update – when does a deputy need COP approval for legal work?
Whilst managing the property and affairs of another person a Deputy appointed by the Court of Protection may come across issues that require them to pay for legal advice and assistance on their behalf. Examples could include purchasing a property, challenging a care plan or obtaining advice about a dispute.
Nothing like bad succession planning to ruin a good reputation
Partner and head of our Private Client team, James Ward, writes about the importance of entrepreneur's putting in place a succession plan to safe guard their reputation.
Ten top tips of Lasting Powers of Attorney (“LPAs”)
LPAs are important, and are steadily growing in popularity as individuals realise how necessary they are to support friends and family in the event that they lose mental capacity. Our previous blog gave an overview of how LPAs work and the requirements for making them. This time, we focus on our ten top tips for LPAs.
What are Powers of Attorneys?
A Power of Attorney is a very important estate planning tool, especially when an individual loses capacity. Whilst the term ‘Power of Attorney’ seems to be thrown around a lot, it is often misunderstood or not used correctly. In fact there are several different kinds of powers of attorney that can be used for different purposes.
Estate Planning 2021 – Looking beyond COVID-19
As we find ourselves in another national lockdown, the New Year presents an opportunity for individuals to review their assets and conduct some succession planning.
Discretionary investment management and Lasting Powers of Attorney
Phoebe Alexander and JIm Sawer blog about lasting powers of attorney and engaging Discretionary Investment.
“Hello, can you hear me?” – video-witnessing of wills to be made legal in England and Wales
Big news was announced by the Government at the end of last month: legislation will be introduced to allow remote electronic witnessing of wills – including for some that have already been made – in a significant amendment to the long-standing requirements. However, it will only be temporary.
Capital Gains Tax – Take steps now to avoid a likely “tax grab”?
Chancellor Rishi Sunak has asked the Office of Tax Simplification to review Capital Gains Tax (“CGT”). CGT is charged on the profit/increase in value on sale or gift of assets. The rates are 18%-28% on disposals of residential property and 10%-20% on other assets. There’s an annual exemption of £12,300 per taxpayer. Disposal of your main residence is tax free and “Entrepreneurs Relief” may see the first £1million of the gain on the sale of a business charged to CGT at the lower rate of 10%.
Lost Will - Lost Inheritance?
On the death of a person known to have made a Will, it’s pretty rare that the Will can’t be found...
We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.
You may also be interested in:
Blog
How should a deputy manage a person’s investments?
Simon Hardy
Blog
The role of a deputy for the elderly – things to consider
Lauren Eyre
Share insightLinkedIn Twitter Facebook Email to a friend Print