Q&A on mental capacity

Enable Law’s Senior Associate Holly Mieville-Hawkins explains what parents need to know.

Holly explains what a Deputyship is as well as Lasting Power of Attorney. She looks at trusts, explaining the difference between a Personal Injury Trust and a Disabled Person Trust. Holly also defines the term ‘deprivation of liberty’.

What is a Deputyship?

A deputy is a person appointed by the Court of Protection. A deputy manages the money and property for, or makes healthcare decisions on behalf of, another person if they can’t do this for themselves. For a child, the test that is applied is whether they are more likely than not to lack mental capacity to manage their own finances or make decisions about their health on reaching the age of 18. There are two types of deputy:
  • The first is a deputy for property and financial affairs, who does things like manage investments, buy and adapt property, employ carers and therapists etc.
  • The second is a deputy for health and welfare decisions, who makes decisions about medical care, who the child should see, where the child should be living etc.
It is much harder to get appointed as a health and welfare deputy than a financial deputy. The role of a deputy is much like that of an attorney under a Lasting Power of Attorney. A deputy is appointed by the Court of Protection. A deputy, like an attorney, is under a duty to always make decisions in the best interests of the child. They must also only use their powers for the child's benefit. There are also restrictions placed on a deputy's powers to make gifts of the child's money or pay family members for caring for the child. Every deputy is monitored by the Office of the Public Guardian (OPG) and a report must be completed each year detailing all decisions made and all money spent and received. The OPG charge a small fee (£320) for this each year and may also visit the deputy and child.

Who can be appointed Deputy?

Anybody can be appointed as deputy, as long as they are not bankrupt. However, the Court will be careful about who they appoint. Deputies can be appointed:
  • to act on their own;
  • jointly (which means all decisions must be taken together and both deputies sign all papers), or
  • jointly and severally (which means that all deputies are authorised to make decisions and are responsible for the decisions to the same extent, but not all deputies have to make each decision). This can leave space for multi-generational deputyships to be in place, which can be useful in order to provide continuity for the child.

What is a Lasting Power of Attorney?

When a child reaches 18, and they have mental capacity to do so, they can appoint an attorney to represent them in respect of their finances, and separately, their medical and care issues. A person cannot have both a deputy and an attorney for the same thing, as the roles are very similar. More detail can be found here.

What is a Personal Injury Trust?

Where a child receives funds as a result of a personal injury, or clinical negligence, against them, it is important that this money is managed on their behalf. In situations where the child is likely to lack capacity to manage their own money on reaching 18, a deputy will most likely need to be appointed for the child. However, if it is more likely than not that the child will have capacity to manage their own finances on reaching 18, then the Court of Protection, or High Court dealing with the personal injury matter, can authorise that a Personal Injury Trust is put in place for that child. The best way of looking at a trust is just as an envelope in which the money from the award is kept safe and managed properly. There are many benefits to having a trust – one being that if it is set up within 52 weeks of receiving any money from the injury, all funds within the trust will be ignored for the purposes of means assessment for benefits or local authority funding. This can be crucially important to the child both in the short and long term. The money will be looked after by what is known as 'Trustees', who will be responsible for investing funds for the child, and will take control of the funds and ensure that they are protected and managed effectively. Trustees will use the money for the child's benefit by doing things like buying and adapting property and equipment, managing a care team, employing therapists and a case manager. A parent, friend or a professional can be a trustee, depending on the circumstances.

Deprivation of Liberty

Parents of a brain injured child may have heard terms such as 'deprivation of liberty' in newspapers over the past few years. This is nothing to worry about when your child is under 16. It is only when the child reaches 16 that deprivation of liberty becomes an issue and, at that point, professional advice should be sought if you have any concerns. Legal aid can be available for this.  

Disabled Persons Trust

Many people want to leave money for a child with disabilities to ensure that they are looked after when they are gone. There are many ways to do this including simple gifts of property and money. However, the drawback of making simple gifts is that the gift may well accidentally interfere with any means tested benefits that the child receives, now or in the future. Therefore, many people chose to set up what are known as 'Disabled Persons Trusts'. They can be set up during the lifetime, or as part of the will, of the person creating the trust. There are many taxation advantages to the disabled person and the person giving the gift of having the trust in place. However, the major advantage of this sort of trust is that because the money doesn’t actually belong to the disabled person it will not usually affect their entitlement to means assessed accommodation or benefits. The person setting up the trust will need to appoint at least two responsible people, or one trust corporation, to be the trustees. They are the people legally responsible for managing the trust fund and making sure that it is only used for the purposes that the person setting up the trust intended. To qualify as 'disabled' and be able to benefit from this type of trust, the person receiving the money must get one of the following at the time it is set up:
  • Middle or higher rate DLA for care, or higher rate DLA for mobility
  • Personal independence payment
  • Attendance allowance
  • Or be incapable of administering his property or managing his affairs because of mental disorder within the meaning of the Mental Health Act 1983.
This note should not be construed as legal advice, but to give an idea about options for managing the finances of, or making financial provision for children with a brain injury, and anybody wishing to consider any of the above should consider taking full, tailored, legal advice on the issue.  
Share page
Print page
Follow us