What would happen if you became unable to understand and deal with your business and financial affairs through ill-health or incapacity? How would you know that someone could be appointed to step in and manage your affairs for you? Who is there to protect and promote your financial and social well-being when you cannot care for it yourself?

The answer to these questions and more in England and Wales is likely to be the Court of Protection (CoP) and their administrative arm the Public Guardianship Office (PGO). They are branches of the Ministry of Justice charged with a duty to promote and support decision-making for those who do not have the capacity to make decisions for themselves.

All matters are dealt with professionally and total honesty and integrity is guaranteed. The Court of Protection has the powers of the High Court and can decide whether a person has the mental capacity to make decisions themselves. They will also decide issues concerning financial matters and welfare questions of those who cannot decide for themselves and will usually appoint someone to make on-going decisions. All hearings are held in private without publicity. As the Public Guardian, the CoP makes decisions based upon what is in the best interests of the person who has lost mental capacity and whom it is representing.

There are basically two separate ways of being appointed to administer the affairs of someone without the necessary capacity. The first is by being appointment in an enduring power of attorney or lasting power of attorney, which is done when the person appointing (known as the ‘donor’) has the necessary mental understanding and is able to manage their own affairs. This is probably the best and easiest route and will typically be taken by someone to appoint their children to manage their affairs when they become too old to do so themselves.

If a person loses their mental ability without having the foresight to execute an EPA or LPA, it will be necessary for the person intending to administer the affairs to apply to the PGA for appointment as a ‘receiver’. The person applying will often be a relative, close friend, or other concerned person but it could also be the local authority or a charity.

The application will be carefully examined and the person applying will be thoroughly checked and scrutinised. An appointment would only be made following medical evidence that the person is indeed mentally unable to deal with his or her affairs. The person appointed will then have the help and support of the PGO who will supervise and check and audit financial transactions.

The role of the Court of Protection is governed by the Mental Capacity Act 2005, which has two core principles. The first is that a person is presumed to have mental capacity unless it is shown otherwise, and the other that the alternative decision maker must make the decisions in the best interests of the person who has lost capacity. It places emphasis on decision making by the person appointed rather than by the court. Resort to the court by the decision maker appointed should be avoided where possible to save costs.