Paytons solicitors

“Capacity”, which is really shorthand for “mental capacity”, is lawyer’s jargon for the ability to make decisions.

We aren’t talking here about being indecisive, but whether an individual has got the level of understanding that is legally required to make decisions for themselves.

Sometimes it’s easy to recognise – the patient in a coma in hospital is clearly not able to make decisions.

But sometimes it isn’t so obvious. Even a loss of short-term memory can make it difficult to for someone to process information. We’ve probably all met, or know, someone who can’t remember what was said to them five minutes ago but has a perfect memory for what happened forty years in the past. They might be able to function perfectly well in ordinary everyday situations, but if something complex or new is presented to them, it all becomes difficult. Making a decision is a complicated blend of memory, understanding, and the balancing of possible consequences of different outcomes.

Capacity is generally lost gradually – and it can rather creep up! But sometimes it is lost suddenly – an accident causing a head injury, stroke, heart attack, or other illnesses, can all leave someone with impaired mental function.

Ideally, someone who loses capacity has in place a Lasting Power of Attorney. Their appointed trusted person can then make decisions for them. It makes dealing with officialdom a whole lot easier.

If there isn’t an LPA in place, then it’s too late to make one. Then, the only thing to do is to apply to the Court of Protection, which is a Government department tasked with approving the appointment of a “Deputy” to look after the affairs of the incapable person – the “patient”, as they are dubbed.

In all probability the Deputy will be a family member, possibly the very person who the patient would have chosen to be their attorney. So, no problem? Well, not quite. The Deputyship process is slower, more expensive and more cumbersome than an LPA. It should really be a last resort.

One other point to bear in mind. Even with an LPA, there are some decisions which an attorney cannot make on behalf of the person who appointed them (the “donor” of the power). For instance, an attorney cannot give the donor’s property away, other than in limited amounts. This can mean that sensible tax planning might be ruled out once capacity is lost.

So the moral of the story is to seriously consider making an LPA, no matter what your age, and to think about tax planning while you still can!

Contact Miranda Hawkes for advice about both financial and “health and welfare” LPAs, and also about tax planning.

Dementia Awareness Week for 2019 is from Monday 20th May until Sunday 26th May and is supported by the Alzheimer’s Society.

Some facts provided by the Alzheimer’s Society show that:

  • Every three minutes someone in the UK develops dementia
  • There are over 850,000 people in the UK with dementia and that number is predicted to rise to over 1 million by 2025 and will soar to 2 million by 2051
  • 1 in 6 people over the age of 80 have dementia
  • 70 per cent of people in care homes have dementia or severe memory problems
  • There are over 40,000 people aged under 65 with dementia in the UK

Everybody starts to become more forgetful as they grow older.  However, dementia is different.  It is a brain disease which affects daily life and is progressive.  It is not a natural part of ageing. Dementia often starts with memory problems but can go on to affect other parts of the brain causing difficulty coping with everyday tasks, difficulty in communicating and changes in mood, judgment or personality.

April 14th, 2019

Posted In: Blog

After someone has died, executors often start by looking on the internet for information on how to obtain probate and administer an estate themselves. But is this really a good idea?

Until 2007, when the first of a married couple died, they had to use their inheritance tax-free allowance (currently £325,000), known as a nil rate band (“NRB”) at the time of that first death – or lose the allowance altogether. Therefore wills usually included a trust, known as a “nil rate band discretionary will trust”.

In 2007 the inheritance tax rules changed

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April 8th, 2019

Posted In: Blog

For people who are lucky enough to be property owners, the idea of “deeds” is deep-rooted. I’ve lost count of the number of people who have talked to me about “getting their deeds” back when they finally pay their mortgage off, or have spoken about whose names are “on the deeds”.

Yet for most property owners, there is no such things as deeds any more.

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March 9th, 2019

Posted In: Blog