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?
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.
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.
A Lasting Power of Attorney (“LPA”) is a legal document which allows you to choose who should help you make decisions or make decisions on your behalf when you lose mental capacity and are no longer able to do so yourself. The person making the LPA is called the ‘donor’ and the person or persons given authority under the LPA are called ‘attorneys’. There are two types of LPA: one for ‘Financial Decisions’, for example paying bills or dealing with properties; and one for ‘Health and Care Decisions’ which can cover decisions from what type of care you receive to whether life sustaining treatment is given or not.
The Government has for some time promised to introduce a register requiring overseas entities holding UK property to identify its beneficial owners, in its effort to increase transparency in UK property ownership and reduce the attraction of the UK’s property market to money launderers. Indeed, we last blogged about the potential overseas entities register in May 2019. With UK-based entities subject to strict information-sharing requirements since 2016 (in the form of the register of People with Significant Control or “PSC Register”), many have been calling for an equivalent overseas entities register to be implemented to provide a way of tracking overseas owners who ultimately own and control UK land.
Laura Harper was delighted to be invited to talk to the editor of ‘Wealthbriefing’ recently about the important topic of philanthropic giving by HNW individuals and families.
Apple officially released its ‘Digital Legacy’ feature on 13 December 2021. This permits individuals who have been nominated by the deceased to access the deceased’s accounts and data after their death. Diva Shah examines the impact of this new feature and its implications for Private Client practitioners in matters of estate planning where digital assets are involved.
The UK government introduced new legislation that will require those working in care homes to be double vaccinated against coronavirus. This has been implemented through the Health and Social Care Act 2008 (Regulated Activities) (Amendment) that came into effect on the 11th November 2021. This regulation is applied to England only.
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As non-UK tax residents, the couple will be subject to special rules for calculating the capital gains tax (“CGT”) due in relation to either the sale or transfer of their UK property.
Our well regarded French contact* has warned us that a new law just passed in France is going to cause problems for Anglo / French succession planning. Under the laws of England and Wales, all individuals have testamentary freedom and can leave their estate to whomever they choose under the terms of their will.
Trans adults with full decision-making capacity have the freedom to secure hormonal and surgical interventions to align their bodies with the physical attributes typical of the gender with which they identify (a process known as “transitioning”). However, for those who lack capacity, the involvement of others who are responsible for making decisions on their behalf is required, and the position can be complex as a result. This blog explores the approach to making decisions relating to transitioning on behalf of protected trans people, applying the best interests test and guidance from case law, and discussing the practicalities for decision-makers.
With the price of crypto assets generally making a good recovery from the Covid-19 related decline of 2019 contrasted with the very recent volatility following issues with the adoption of the cryptocurrency as legal tender in El Salvador, investors in cryptocurrencies might be considering realising some of their gains to try to help minimise any further instability.
In recent years there have been calls for a change in the law to protect vulnerable adults from falling victim to what has become known as “predatory marriage”. This is due to a rise in cases where fraudsters have married vulnerable and often elderly individuals, without the knowledge of their loved ones.
The Office of the Public Guardian (OPG) and the Ministry of Justice are working together to modernise the process of making and registering Lasting Powers of Attorney (LPAs). The consultation is open to the public and will remain open until 13 October 2021.
Good news – The “secret” specialist HMRC unit set up in 2019 to examine the tax avoidance risks has been wound up after finding no evidence of correlation between the use of FICs and non-compliant behaviour.
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.
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.
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.
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.
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?"
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 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.
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