News and Insights
24 January 2020
With increasing technological advances, should we be moving towards separate digital Wills to cover either our digital assets, or our entire estate?
The ability to think clearly and make decisions is something that most of us take for granted. However, the capacity to make decisions may become limited by virtue of an accident, stroke, issues with mental health, dementia or addiction. With an ageing population, Jersey welcomed the Capacity and Self-Determination (Jersey) Law 2016 (“CSDL”) which came into force in 2018. This piece of legislation closely followed the UK’s Mental Capacity Act of 2005.Prior to the CSDL, there was no set of clear rules confirming when a person should be treated as lacking capacity to make their own decisions. The CSDL sought to modernise the law with regards to mental capability and empowers individuals to make decisions for themselves for as long as they are able. A person is assumed to have capacity until it is proven otherwise, and as a result, a new capacity test has been developed.
Lasting Powers of Attorney: Explained
Essentially, a lasting power of attorney (“LPA”) appoints someone to make decisions on your behalf should you become unable to do so in the future. This means individuals are now able to put measures into place to prepare for a future where they may lack capacity by drawing up a LPA. If you are worried about losing the ability to manage your finances or who will make decisions about your welfare in later life, you may wish to consider making a lasting power of attorney.
There are two types of LPA available, one which deals with property and financial affairs, and one which deals with health and welfare. They can be put in place by anyone over the age of 18 provided they have capacity to do so. The same attorney can be appointed for each LPA, they can be different, or there can be more than one person appointed. The person making the LPA is known as the Donor. The LPA for property and financial affairs can either come into force immediately upon registration, or power can be given to your attorney to manage your property and finances only after you lose your capacity.
An attorney acting under a health and welfare LPA can only make decisions if you lack mental capacity to make your own decisions. You can also give your attorney power to make decisions relating to life sustaining treatment and you can detail in the LPA directions and preferences for your attorney to follow regarding your future healthcare wishes. If you have specific preferences and wish to refuse certain life sustaining treatments, there is also a document called an ADRT (an advanced decision to refuse treatment). This will allow you to make decisions in relation to refusing life sustaining treatment.
When your attorney makes a decision, they must do so in your best interests. Failure to do so could result in your attorney being convicted of a criminal offence and liable to reimburse your estate for any loss. Whilst any actions not in your best interests would be against the law, the actions of attorneys are not strictly monitored and there are many examples of abuse in the UK. It is therefore important to choose your attorney and specific wishes wisely.
Drawing up a Lasting Power of Attorney
An online system has been developed to create LPA’s. The forms must be completed online and must then be printed, signed and witnessed by a specific professional. The Judicial Greffe charge £25 to register each LPA, and there is a reduction if you are in receipt of certain benefits. Once the form has been registered (after 14 days) you will be issued with a registration certificate which can be relied upon by third parties.
A LPA can be changed or cancelled at any time provided the Donor has the requisite mental capacity to make the changes or cancel the instrument.
The introduction of the CSDL in 2018 has been a welcome step and has helped Jersey modernise mental health law whilst supporting individuals to make their own decisions as far as possible. We are seeing many people putting LPA’s in place at the same time as signing their wills, and both documents are often reviewed alongside each other. A decision made by your attorney in the future may affect the assets available for distribution in your Wills and should be considered carefully. LPA’s are becoming important instruments to plan for the future and to ensure your wishes are followed in the event that you lose capacity to make decisions for yourself.
If you would like to discuss lasting powers of attorney, mental capacity or any other aspect of the CSDL, our knowledgeable team at Viberts can be with you every step of the way.
As published in the JEP's 'Financing Your Future' supplement on 24 January 2020.