If you are presenting a claim for NHS Continuing Healthcare Funding on behalf of a spouse, relative, friend or else representing an individual in a professional capacity, it is essential that you have the necessary legal authority to act.
Different legal authorities will be needed depending on whether the individual is alive and currently in care or going into care, or has passed away and you are making a retrospective claim on their behalf to recover care fees that were wrongly paid. In either situation you will need the appropriate legal standing to represent your relative. Just being related might not be enough.
What is a Lasting Power of Attorney?
For living relatives, you will need a Lasting Power of Attorney (‘LPA’).
If your relative has mental capacity, as ‘donor’, they can grant Lasting Power of Attorney to their appointed representative(s), known as their ‘attorney’, to act on their behalf and make decisions at a time when they can’t do so for themselves should they lose mental capacity. An attorney is usually someone the donor trusts to act in their best interests such as a spouse, child, parent or trusted professional adviser.
A Lasting Power of Attorney can be for:
(1) health and welfare decisions; and/or
(2) property and financial decisions
Having an LPA gives the donor peace of mind knowing that, should they suddenly lose mental capacity (e.g. after an accident or stroke etc.) all their personal wants, wishes and needs will be taken care of without delay, by someone they have specifically chosen to make decisions in their best interests.
However, once an individual has lost mental capacity, it is too late to make an LPA, and a representative will have to apply to the Court of Protection for a Deputyship Order whereby the Court will appoint a Deputy to make such decisions on their relative’s behalf instead. This process can be expensive and cause delays whilst vital health-related and financial decisions could be put on hold waiting for a Deputy to be appointed.
An LPA is only valid during the donor’s lifetime and lapses automatically upon death.
In short, creating an LPA puts you, as the donor, in control and gives legal authority to your chosen attorney to make critical health and financial decisions in the event that one day, you can’t.
For more information about LPAs, read our blog:
Essential: Have You Got A Power Of Attorney?
Self-defence – Protect yourself and make a Lasting Power of Attorney
https://www.gov.uk/government/collections/lasting-power-of-attorney-forms
Acting in Best Interests
However, if your relative has lost mental capacity and has not created a Lasting Power of Attorney, then a ‘decision-maker’ can be appointed to take responsibility for making necessary decisions on their behalf – acting in their ‘best interests’. The decision-maker could be a health professional and not a close family member.
The decision-maker should consult with all relevant parties who may be involved or have an interest in the decision process eg a spouse, parent or medical practitioner. But quite often, there can be tension, conflict and even arguments whilst emotions run high – especially if the decision-maker overrides or ignores what other family members think is in the best interests of their relative.
An LPA would avoid this situation and potential conflict.
For more information, read our blogs:
Tackling consent: Keeping control if your relative lacks mental capacity
Acting under a Will
If your relative has passed away, their appointed representative(s) will have authority to act under the terms of their Will.
A Will is a legal document setting out what you (the ‘testator’) says should happen to your estate (e.g. your property, home, bank accounts, investments, savings, assets, possessions and personal belongings etc.) after you die.
A Will enables the testator to appoint chosen representatives (known as ‘Executors’) to automatically deal with their estate after death. Being an Executor carries enormous responsibility, so it is important that you choose people you trust and who are capable of carrying out this duty for you competently.
Duties and powers of the Executors can be specified in the Will, and they can be as wide or as narrow as the testator wants. Usually these powers of authority will include things like collecting, valuing and distributing assets within the estate, paying any taxes and funeral expenses, and distributing gifts (‘legacies’) to people) they have specifically chosen to benefit from their estate (‘beneficiaries’) e.g. making gifts of money, jewellery, shares, cars, charity donations etc.
You can now easily see the advantages of making a Will. You specifically choose who you want to inherit your wealth, rather than leaving it to chance.
For more information about Wills read our blogs:
I have a will, so why do I need a Lasting Power of Attorney?
What is a Grant of Probate?
Depending on the type and value of the assets the deceased owned, before the appointed Executors can legally administer (ie deal with) the deceased’s estate and start to liquidate, sell or distribute assets, they must first apply to the Probate Registry (a court) for a Grant of Probate.
A Grant of Probate (‘Grant’) is legal confirmation from the court that the Will is valid and has been officially registered, and the Executors named in the Will are the only ones with authority to deal with the assets of the estate.
Once the Grant has been issued, it confers the legal right to the personal representatives named in the Grant to administer the estate. For example, the Grant gives the legal right to sell or transfer property belonging to the estate, such as the deceased’s house, contents and any other personal possessions; paying off debts, bills and taxes; liaise with banks and close accounts; cash-in savings and investments such as, stocks, shares and ISAs etc; pay any professional (legal and accountancy) fees – before distributing any balance in accordance with the wishes expressed in the Will.
If the deceased left assets in their sole name with a total value of more than £5,000 then the appointed Executors will usually need to obtain a Grant.
However, smaller estates valued up to £5,000 can usually be liquidated without going through Probate.
I have a Will so why do I need a Grant of Probate?
You don’t usually need to apply for a Grant of Probate if there is a valid Will and the assets are held jointly eg money in bank accounts, investments, land or property, as these items will automatically pass to the surviving joint owner(s) on death. So, for example, if a husband and wife jointly own their home, the house will automatically pass to the surviving spouse on the other’s death.
Whereas, if assets are held in the deceased’s sole name, such as an investment, then the Executors may need to get a Grant of Probate to have legal access to the investment and deal with it as necessary or cash it in.
Where to apply for the Grant?
Executors should apply to the local Probate Registry Office closest to where the death occurred. You can find the details by going to this link:
https://www.gov.uk/register-offices
You can also access the probate forms online here: https://www.gov.uk/government/publications/form-pa1p-apply-for-probate-the-deceased-had-a-will
What happens if there’s no Will?
If the individual died without leaving a Will, there is no automatic legal right granted to a chosen representative to administer their estate.
Instead, the next of kin, usually a surviving spouse (but not partner or civil partners), child, parent or sibling, can apply to the Probate Registry for a different type of Grant – known as ‘Letters of Administration’ – to enable them to legally administer the estate.
This can, of course, cause problems for example, if family members cannot agree which of them would be the best person to administer with the Estate. To avoid disputes and delays, it is therefore always advisable to make a Will.
When someone dies without having a valid Will, this is known as dying ‘Intestate’.
The prescribed Intestacy Rules will apply in this eventuality, and these provide for a specific order of beneficiaries who will be entitled to the estate. For further information, see our blog: Is your Will up to date?
If the Intestacy Rules come into play it could invariably mean that some relatives and other beneficiaries whom the deceased may have wanted to benefit from their estate, may not receive anything at all!
You can now appreciate why it is vital to make a Will if you want to ensure that your affairs are dealt with in an orderly manner and that specific people, organisations or charities you want to look after will benefit from your accumulated estate.
Beware! When applying for either Grant (with or without a Will), you will also need to send off an inheritance tax (IHT) form to the Probate Registry. If the estate is valued at less than the ‘nil rate band’ threshold (currently £325,000), you will be exempt from paying IHT. Any tax is payable before the Grant is issued. So, timing when lodging the application can be an important consideration as it may trigger a large tax bill which has to be paid upfront! We do not offer any tax advice as this is an area where we suggest you seek specialist legal advice.
Letters of Administration can also be issued (usually to a beneficiary) where there is a valid Will, but the Executors named in the Will do not apply for a Grant of Probate – perhaps because they do not want to act as Executor, are no longer capable of doing so, or have already passed away.
Can the CCG refuse to pay restitution for a successful retrospective claim without a Grant?
In theory, yes they can! CCGs can make life difficult here.
They have to protect themselves and make sure that before they release funds, the recipient has the appropriate authority (i.e. a Grant) to confirm their legal standing to accept funds on behalf of the estate. Imagine the repercussions if the CCG paid restitution on a retrospective review claim to someone without proper legal entitlement!
Therefore, if you have a retrospective claim or appeal pending, you may decide to apply for the Grant in advance of the outcome decision to save time, and enable you to deal with the restitution monies immediately and without delay. The downside, of course, is that you may incur a tax liability and your relative’s NHS Continuing Healthcare retrospective case may not be successful! In most cases, however, the Executors will apply for the Grant shortly after death as often it will be needed to enable them to deal with other matters relating to the estate.
Do I need a Grant of Probate to issue court proceedings?
Again, the answer is ‘yes’.
In order to have legal standing in court and give instructions to your legal team, a Grant will be required confirming that you have the requisite authority and standing to act.
Summary
After reading this article the benefits of having an LPA and valid Will should be obvious, and if you don’t have either of these documents, go and take immediate action to remedy the situation. If you made a Will a long time ago, get it out and refresh your memory. Does it need updating? Do you still want the same Executors? Are there any other beneficiaries you would like to include (or even remove) from your Will?
Protect yourself and your assets and put suitable representatives of your personal choice in place to take care of you and your assets at a time when you no longer can.
Take professional advice, if needed, to create your LPA and Will, or check that your existing Will is valid and up to date.
Or, if you need help specialist help with your Grant get in touch via our 1-2-1 page.
For more information visit:
https://www.gov.uk/government/organisations/hm-revenue-customs/contact/probate-general-enquiries
Plus, look at these blogs:
Why you should consider making Lasting Power of Attorney or a Will
Lasting Power of Attorney: 4 ways to start the conversation.
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