Mental Health: How the law can protect you and your loved ones

Lasting Powers of Attorney

A lasting power of attorney is a legal document which gives a person or people (known as attorneys) the power to make decisions on your behalf, should you at any time lack mental capacity. This means that due to accident, illness you are unable to make decisions for yourself.

There are two types of lasting power of attorney document you can make:

  • Health and welfare LPA;
    • This covers decisions around your day to day care, medical treatments, moving into a care home and life sustaining medicine.
    • It can only be used once you lack mental capacity.
  • Property and Financial Affairs LPA;
    • This covers financial affairs such as managing bank accounts, collecting pension payments and paying bills.
    • It also covers property matters such as selling your home.
    • This can be used as soon as the LPA is registered.

Why is it important to create a lasting power of attorney?

If you don’t create an LPA and then you lose your mental capacity, your loved ones will face a long legal struggle in order to gain control of your finances. One common example is if they need to sell your home in order to pay for better care or more suitable accommodation. If there is no lasting power of attorney, gaining control can be a lengthy, costly and stressful legal process.

Once a person loses mental capacity they can no longer create a lasting power of attorney so you should create one sooner rather than later and enjoy the peace of mind that it’s in place should the worst happen.


Capacity to enter contracts

The general rule is that a mentally disordered person is bound by his contract (e.g. Tenancy agreements/Mortgage deeds) unless he can show that, owing to his mental condition:

  • He did not understand what he was doing, and further;
  • That the other party was aware of his incapacity.

The general rule does not apply to contracts of sale of “necessaries” (e.g. Gas/water bills).

Due to the fact that it is arguable that if the Landlord/Mortgagee “ought to have known” about the client’s incapacity, that would be sufficient to impart knowledge, the client’s demeanour at the time of the entering into the contract is an important factor.

If the client can satisfy the general rule, then the contract is “voidable”.  It is therefore open to the client to declare the contact void and have no binding effect (note it is not automatically made void).

However, if the client subsequently has a period of lucidity (and thus regains capacity) and during that period pays rent/mortgage instalments, he/she will be deemed to have “ratified” the contract and will thereafter be bound by it (Matthews v Baxter [1873] LR 8 Ex 132).

Often mortgages are taken out with the assistance of a Mortgage Broker and the Mortgagee will have had no direct contact with the client.  It is arguable (but will, no doubt, be strenuously objected to by the mortgagee) that the Broker is the agent of the Mortgagee and thus is bound by the Brokers knowledge of incapacity.


How can we help?

If you or someone you love is facing one of the issues above, call and make an appointment with one of our expert solicitors. We can ensure you’re prepared whatever the future brings.

Likewise, if you feel like you are trapped in a contract which you don’t believe you had capacity to enter into then we have the legal knowledge to protect you and take legal action to make your contract voidable.