New toolkit: making financial decisions for young people who lack capacity

The Ministry of Justice has developed a new toolkit which aims to help parents and carers make financial decisions for young people who lack capacity.

The toolkit explains what lacking mental capacity means (and the difference between lacking mental capacity and fluctuating capacity), as well as the five principles of the Mental Capacity Act (MCA).

Decisions must always be made in the person’s best interests

The MCA sets out five clear rules you must follow to support a young person aged 16 and over who lacks the capacity to make their own decisions. These are:

1. A person must be assumed to have capacity unless it is established that he lacks capacity
2. A person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success
3. A person is not to be treated as unable to make a decision merely because he made an unwise decision
4. An act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in their best interests
5. Before the act is done, or the decision is made, regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person’s rights and freedom of action.

Using these principles, the toolkit guides parents and carers through their responsibilities to their child, and how this changes when they become an adult.

The toolkit explains that before the age of 16, parents and carers are able to make decision on their child’s behalf. But when they reach 16, the MCA framework will begin to apply.

While it is complicated how exactly the framework applies between the ages of 16 and 18, the toolkit suggests that parents should take steps to support the young to make their own decision. If they cannot make their own decision, the decision you make on their behalf should be in their best interests.

Guiding parents/carers through the changes to decision making processes once the young person becomes an adult

Once a child turns 18, all the MCA principles apply, and parents/carers no longer have parental responsibility to make decisions for them.

To make a decision on the behalf of someone who has turned 18, you must seek their consent and apply the principles of the MCA. If they lack the capacity to provide consent, you must obtain the relevant legal authority to make the financial decision for them.

For example, if a person has capacity, they may wish to make a property and affairs lasting power of attorney (LPA) to allow someone (called the ‘attorney’) they trust to make financial decisions on their behalf.

If a person lacks capacity to make decisions for themselves, and no LPA has been created, parents/carers will need to apply to the Court of Protection to appoint a deputy (who is often the person’s family member, carer or friend) to manage their property or accounts on their behalf.

The toolkit also provides information on managing state benefits and obtaining legal authority to make financial decisions for a young adult depends on their capacity, including accessing a Child Trust Fund.

Parents and carers can also find out how to prepare an application for the Court of Protection and how to apply for a property and affairs order, as well as additional resources and a glossary of terms often used in court.

You can access the toolkit here.