Marriage doesn’t give you an automatic right to your partner’s finances. As Nichola Barnes explains, without plans in place, vital funds could be inaccessible for months if one of you loses mental capacity…
My husband pays our household bills from his personal account. If he was to develop dementia, will I be able to manage our finances?
It is a common misconception that spouses, as next of kin, have automatic access to each other’s finances in the event either party loses mental capacity. This is not the case.
As a result, I often encounter couples who have left it too late to prepare Powers of Attorney. By the time they realise their predicament, one of them is incapacitated and their finances cannot be touched.
At this point, the only option is to submit an application to the Court of Protection asking to be appointed as a ‘deputy’ to manage the property and affairs of your partner. However, it is not a simple process.
The first step is to ask your spouse’s GP to complete a specific medical form confirming the patient does not have mental capacity. This, together with an application form, an assets and liabilities form and a declaration for the proposed deputy must then be submitted to the court.
Once the application has been issued, the court will decide who, if anyone, needs to be notified, giving them the opportunity to object. Assuming no one does, you will be directed to take out a security bond, which is payable annually, and a judge will stipulate the level of supervision you require – supervision fees are also charged annually. You will then be obliged to file a report to the court each year detailing your dealings on your spouse’s behalf.
This process usually takes between six and ten months to complete, but given the backlogs we are experiencing as a result of the pandemic, the wait might be even longer. Making an application to the Court of Protection can also prove expensive.
How would we benefit from having Powers of Attorney?
Should the worst happen and one of you develops dementia, or has a serious accident, it is much quicker, cheaper and less stressful for your loved ones if you have a Lasting Power of Attorney (LPA) in place.
These legal documents usually sit alongside your will and allow you to decide who you wish to manage your finances and/or welfare.
One of the key requirements of an LPA is that the person making it must have mental capacity, so it is important not to leave it too late. It can be drawn up at any time and once registered with the Office of the Public Guardian, will sit dormant until it is needed.
It is important to take professional advice when setting up an LPA to cover finances, particularly if your affairs are complex, but it offers a wide range of benefits. It can be used while you still have mental capacity if, for example, something needs dealing with while you are on holiday, or if you are hospitalised or housebound. It is designed to help with issues such as buying and selling property, paying bills and managing investments.
To find out more about Court of Protection applications or making a Lasting Power of Attorney, why not book a free 30-minute consultation with one of our probate specialists? Telephone (0114) 218 4000 or email info@tayloremmet.co.uk