Capacity is a term that comes up a lot when you are in the process of undertaking services such as Will writing and the granting of a Power of Attorney. Here at Thomas Bradley, we are here to help explain to you what the term capacity means and why it is important when it comes to estate planning.
Capacity; Legal or Mental?
Legal capacity is granted to all persons who have the ability to hold and act upon their rights as an individual. In the UK, a person is granted legal capacity to enter into transactions once they achieve the age of 16. Put simply, Legal capacity is the right of a person to enter into contractual agreements and transactions.
While everyone has the right to legal capacity, not everyone has the mental capacity to hold legal capacity. Mental capacity is determined by an individual’s ability to understand and make decisions both big and small, from how to make a sandwich to who should be named in their Will. Persons who are unable to understand and make decisions on their own behalf are said to ‘lack capacity’. Those people who lack capacity can do so for various reasons such as; injury, illnesses like dementia or mental health issues to name a few.
How is mental capacity determined?
Mental capacity is determined by way of an assessment carried out by either a practising medical practitioner or a practising solicitor. These assessments are used to determine whether or not a person has the ability to make decisions whether they be simple everyday decisions or potentially life-changing ones.
A person is deemed to have mental capacity until such times as they show potential to be lacking capacity, this can be exhibited through changes in behaviour or a change in their medical circumstances - for example they have been diagnosed with a condition that impairs the ability to think and make decisions.
The first stage in a mental capacity assessment is known as a ‘diagnostic’ test. During this section of the test, the doctor or solicitor will discuss your medical history, this is a potential avenue to determine if there are any hereditary reasons why you could be losing or lacking capacity. It may also shed light on if you have exhibited past behaviours which would suggest you have been losing capacity for some time. This stage of the test also determines whether there has been undue influence placed upon you by family or friends. If the first stage is found to have the possibility of a mental impairment, then the second stage of the assessment will begin.
The second stage of the assessment is the ‘functionality’ test. This is where the relevant professional will determine how the potential impairment affects you and your ability to make decisions on your own. A person is deemed to lack capacity if they are unable to take into consideration all relevant factors, give the appropriate amount of consideration to decision making, be unable to retain information, as well as being unable to effectively communicate the reasoning behind the decision they have made.
The importance of mental capacity
Mental capacity is important in all areas of life when it comes to making decisions on your own behalf. It is especially important when it comes to medical decisions and estate planning. As much as we would like to believe we will be fit and healthy forever, we are all aware of our eventual demise, and that is why it is so important to get your estate in order and make provisions for a Power of Attorney to be activated in the instance that you lack capacity.
If you don’t prepare your estate and make the provision for a Power of Attorney and you are then found to be lacking capacity this can raise a lot of problems for your loved ones when they attempt to do what they think is in your best interests. If you lose capacity and are unable to make your own financial and welfare decisions, your loved ones will be forced to apply to make decisions on your behalf. This can be a long-drawn-out process which can take up a lot of time that you may not have.
When applying to make decisions on behalf of a person who has lost capacity the process varies depending on which part of the UK you are in. In Scotland, you would apply for a Guardianship order through the Office of Public Guardian (Scotland) and this is a lengthy process which is known to take anywhere from 6 months to a year to complete. Whereas in England and Wales, you will need to apply to become a ‘deputy’ for the incapacitated person via the Court of Protection – this is not a speedy process, this can take at least 21 weeks to complete.
Save your loved ones the stress and anxiety of lengthy proceedings by taking the time to meet with one of our experienced Estate Planning Consultants and ensure that you are prepared for any and all eventualities that your future may hold.