July 2, 2020

To apply or not to apply to the Court of Protection?

Power of Attorney

Where Attorneys appointed under a Lasting Power of Attorney (LPA) have legal authority to act and/or the person who made the LPA ("the Donor") loses the requisite mental capacity to manage their funds, it is imperative that their Attorneys' actions are in accordance with their duties under the Mental Capacity Act ("MCA").

Limitations on Attorneys

The ability of Attorneys to make gifts on behalf of Donors – specifically what Attorneys can and cannot do without the express permission of the Court of Protection ("COP") – is one such issue governed by the MCA. Some of the restrictions can come as a great surprise and even the most conscientious Attorney can find he or she has unwittingly transgressed their authority. Gifts can encompass the more predictable Christmas and birthday presents or the sale of a property at an undervalue. However, gifts have also been found to include the possibly less predictable, interest-free loans and the payment of school fees for a non-dependent. There seems to be a misplaced presumption by many that if the Donor was doing something/paying for something before he/she lost capacity then the Attorney would be doing 'the right thing' to continue that action once the Donor's capacity has gone. Alas, were it only that simple.

When is the express permission of the COP required?

It is most prudent to imagine the COP needs to be approached for approval in respect of almost all actions beyond the giving of gifts on customary occasions (which themselves need to be reasonable, which incorporates an aspect of taking into account affordability), and anything indisputably defined as meeting a need of a dependent, such as a spouse. For example, if an elderly Donor continues to live with his wife, in their home, and he has always paid all household bills, the continuation of payment of those bills would not require COP approval and would be seen as acceptable maintenance of the spouse. However, if the elderly Donor had also been paying for his grandson'’s schools fees, in order for him to continue to cover those costs, and to ensure the Attorney was not acting unlawfully by using the Donor's money to pay those fees, the Attorney would first need to seek COP approval to keep paying those school fees.

The COP wants to be sure that the Donor's money is being spent in a proper manner, in accordance with the guiding principles set out in the MCA. Attorneys and their advisors should be wary of monies being spent beyond everyday expenses, which have not received sufficient consideration as to whether a COP application for approval is required. Advisors need to be additionally alert to what may be financial abuse, a criminal offence, being masqueraded as 'harmless' gifts (albeit without requisite COP approval).

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