We may all be affected by loss of mental capacity in our lifetime; whether it is ourselves or a loved one. Illness, accident or even old age can have a devastating effect on our ability, and the ability of people around us, to manage day to day life. So what happens if a loved one, family member or friend loses the ability to manage their own finances?
Some of the most important decisions we make in life relate to our money and property. These decisions are much harder if being made for someone else and can come with a heavy burden of responsibility. There can be a number of unexpected circumstances that arise leading to the loss of capacity and these can occur at any age. However, there is one area in which we are seeing a growing number of enquiries, namely the elderly.
With an increased awareness of mental incapacity conditions such as Dementia and a generation of people living longer, there is a higher demand for family and others to look after the finances of the nation’s elderly. Many elderly people may not have appointed attorneys to look after their affairs if they lose capacity via a Lasting Power of Attorney (LPA). In the absence of an LPA, you may have to make the difficult decision about whether to become a Court of Protection (COP) appointed deputy for the elderly person.
The role allows a family member, friend or professional to manage all matters relating to the property and financial affairs of someone who has lost the capacity to do so themselves, in the same way as an attorney of an LPA would if one had been made. It's a role one should not take lightly.
The deputy has a duty to act in the person’s best interest. This is done by managing and protecting the assets of the person concerned, ensuring they receive the money they need to live comfortably and enjoy life and to provide some peace of mind to those who need it most.
Something that can be considered prior to you taking on the role, and when the elderly person concerned has a low level of finances, is to seek consent from the local authority to become an appointee. They will be able to receive any benefits, or other small amounts of income, to allow them to pay bills, care fees and manage that person's finances. This may relieve the burden from family members if they are not in a position to take on the role; however it may not be an option that is readily available.
So what should you consider when thinking about becoming a deputy?
The role of a deputy can be demanding and is dependent on the level of assets held and complexity of the issues which may arise. Information relating to assets will need to be gathered. This can include property in the UK and/or abroad, bank accounts, investments including shares and ISAs. Even items such as jewellery, artwork and antiques will need to be managed and understood. Day to day living expenses including utilities and care will also need to be considered and affordability reviewed regularly. This may take a considerable amount of time and you may also find that much of the paperwork required is not readily available. Therefore having the time to invest in the role will be of great assistance.
The deputy is required to make an annual report as to what decisions have been made each year to the Office of the Public Guardian (OPG), who oversee and supervise all deputyships. Therefore a through record of all transactions and actions will need to be kept.
Given the nature of the type of work that a deputy undertakes, there may often be disagreements between family members as to how the elderly person’s finances should be managed. Having support from other family members and friends will make the role easier. Though in circumstances where these relationships may break down, help can be sought from either the OPG and/or the COP. They are government bodies which are able to provide advice and support as well as handle any complaints of financial abuse. If the effective management of the deputyship becomes difficult, it may be worthwhile seeking the appointment of a professional deputy. An independent deputy can be appointed to complete the work on an unbiased and impartial basis.
Either way, the management of the property and finances held by either yourself or a loved one is an important consideration for all. Ensuring that the right person is in place to make these decisions can make the world of difference at any point in life.