Mental Capacity
The team of specialist mental capacity solicitors at Onions & Davies are dedicated to assisting and guiding you in arranging affairs for those less capable of caring for themselves.
The firm offers a comprehensive range of legal services that encompasses everything from Court of Protection Applications, and Lasting Powers of Attorney to Drafting Wills and establishing Trust Arrangements.
Mental Capacity Guide
We understand the importance and complexity of ensuring your loved ones are taken care of if you become unable to do so or after your death. Your peace of mind is our priority, and we are committed to helping you provide for the ones you love, even when you are no longer able to do so yourself. Read our Mental Capacity guide below, which provides some basic information for those who wish to look at the best ways of arranging affairs for those who cannot care for themselves so that the person they care for can be properly provided for after their death.
If you require assistance or advice, our specialist Private Client solicitors are ready to share their knowledge and experience with you. For more information about our services, please get in touch with us at chris@onionsanddavies.co.uk.
What if I become Mentally Incapable?
If you become mentally incapable of managing your finances, how can you be sure that the person you are providing for can continue being provided for?
When it comes to ensuring the continued provision of finances for a dependent, it’s crucial to have appropriate arrangements in place, particularly if you become unable to manage your own affairs. One of the most effective methods is establishing a Lasting Power of Attorney – Financial Decisions. Under this power, your attorney can continue to deal with your finances in the same way that you have done, including ways in which you have benefited other people.
You can use specific wording within the form to provide necessary directions to your attorney. Please read our separate Guide regarding Lasting Powers of Attorney.
Another approach is setting up a trust, either linked with a specific investment or as a standalone arrangement. Trusts can be established during your lifetime or after your death via the terms of a will. Further information on trusts can be found later in this Guide.
To continue providing for someone after you have died, you cannot use a Lasting Power of Attorney as these are cancelled on death. The most appropriate action you can take is to make a Will.
At Onions & Davies, we are committed to assisting you every step of the way in these processes. Our private client services include Drafting a Will, Creating and Registering Lasting Powers of Attorney, and establishing Trusts. With years of expertise in these specialist areas of law, we strive to provide a seamless service and peace of mind, knowing your loved ones’ future is secure. Let us help you tailor a strategy that aligns with your financial goals and personal circumstances.
Will-making
We have produced a separate Guide on will-making generally, so please refer to that. However, the main reason for making a will is that, if you do not, the Intestacy Rules will apply and you will get no choice as to how your estate is distributed and who deals with it.
In circumstances where you wish to use your estate to continue providing for a mentally incapable beneficiary after your death, it is extremely important that you choose how that takes effect.
It is worth noting that you may be caring for someone older than you, rather than younger than you. You can continue to provide for them through your will, but it is worth bearing in mind that most people would want wealth to pass down rather than up because it would only have to come down again. However, it does depend on what you want to achieve, and the comments below would apply equally to all mentally incapable beneficiaries, whatever age they are.
With a long-standing reputation for providing personalised, professional legal services, you can trust us to handle your will with utmost discretion and care. Whether you have straightforward circumstances or more complex asset arrangements, Onions & Davies is committed to delivering comprehensive will writing services, offering you peace of mind for the future. Find out more about our Will Drafting services.
Straightforward gifts
It would be possible for you to give a fixed amount or a share of your estate directly to the beneficiary concerned. However, there are two main reasons why you would not wish to do this.
The first is that, if the person does not have sufficient mental capacity to deal with finances, they would not be able to use what you leave to them, without having to involve an attorney of their own (if they have been able to make a Power of Attorney) or the Court of Protection (if there is no attorney).
The second reason is that, if the person concerned is in receipt of means tested benefits, anything they receive from you will affect their entitlement and not only could they lose those benefits, but also the extra passported ones that are related to them. You would therefore not be giving them any added value.
You could decide that it would be better not to leave them anything at all, but not only would you still not be providing them with any benefit, your estate could be contested.
If you have been providing for someone financially during your lifetime and that provision stops when you die, that person, or someone on their behalf could make a claim on your estate for that provision to continue. If the person concerned is vulnerable and in receipt of state benefits, the claim could be made by the DWP and the chances of success are even higher.
Some people decide, particularly where they have several children and one of them is mentally incapable, to leave their estate to their capable children with the understanding that they will use some of the money to benefit the mentally incapable child.
This is not recommended, partly because it still leaves open the chance of a claim against the estate, but also because the other children could keep the money for themselves or something could happen to them (divorce, bankruptcy, death, etc.) which would affect that money.
Trustees
Your choice of trustees (you need a minimum of two) is crucial since they have complete power over the trust fund.
As with all executors and trustees, you should choose someone whom you trust and who would be comfortable dealing with administrative procedures. For a discretionary trust, you are also choosing someone who can make the right decisions in the ongoing circumstances.
We would recommend that you produce a letter of wishes giving guidance to your trustees as to how you would like them to exercise their powers. This cannot bind them to a particular course of action but can communicate to them what you would like them to do with the trust fund.
It can be useful having a trustee who has day-to-day knowledge of the beneficiary’s circumstances and it can be useful having a trustee who is aware of the rules surrounding this area of law. Quite often we recommend a solicitor and a family member to work together.
Beneficiaries
There must be a range of potential beneficiaries so that the trustees have a genuine choice. One of these will be the mentally incapable beneficiary and the others will usually be other family members, friends or even charities. The letter of wishes will request the trustees to look after the interests of the mentally incapable beneficiary first and foremost.
Quite often, a mentally incapable beneficiary has a shortened life expectancy and it may that they die before the trust fund is used up. You can therefore give direction to the trustees as to how they should distribute the remaining trust fund.
The letter of wishes does not need to be particularly legally worded but should contain as much information as possible to show the sort of things that you would like the trustees to spend the money on, for the benefit of the mentally incapable beneficiary.
Lifetime trusts
It is possible to set trusts such as these up during your lifetime rather than through your will on your death. Sometimes that is preferable if you wish to dispose of money or assets while you are alive – for tax planning purposes, perhaps. If you do set up a lifetime trust, then you can word your will so that the appropriate part of your estate passes into that trust and adds to it when you die.
Pension plans are types of trust and it may be possible for you to provide instructions to the pension administrators to pay residual amounts into discretionary trusts such as these.
You may prefer to set up a charitable trust, particularly if your mentally incapable beneficiary suffers from a particular illness or syndrome and you wish to provide funds not only for them but for other similar sufferers. Pension fund monies are especially suited to this sort of arrangement.
How We Can Help
At Onions & Davies, we provide comprehensive support in establishing trust funds and on various aspects such as the role and selection of trustees, administrative processes of the trust, and potential tax implications. Whether you need assistance setting up the fund or ongoing direction on its operation, we are committed to providing high-quality, tailored services every step of the way. Find out more about our Trusts services.
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