WEALTH // Financial Protection for Vulnerable Individuals

 
 

Managing the estate of a loved one who has lost mental capacity can be a complex and emotional process. When someone is unable to make or amend their will, the Court of Protection steps in to ensure their estate is handled fairly and in their best interests. This guide explores the process of applying for a Statutory Will, the legal safeguards in place, and how to recognise and prevent financial abuse of vulnerable individuals. By understanding these key aspects, families and professionals can take proactive steps to protect assets, ensure fairness, and uphold the true wishes of those who can no longer express them fully.

 

Understanding the Court of Protection and Statutory Wills

The Court of Protection plays a crucial role in cases where an individual loses mental capacity and can no longer make decisions about their estate. Unlike probate disputes, which occur after death, the Court of Protection deals with cases while the individual is still alive but unable to create or amend their will.

A Statutory Will is a will made on behalf of a person (referred to as P) who lacks the mental capacity to create one themselves. This process ensures that their estate is distributed in a manner that reflects their best interests and what they would likely have wanted if they had capacity.

When Can a Statutory Will Be Applied For?

There are two key scenarios where an application for a Statutory Will may be necessary:

  1. Intestacy Situations – If the individual never made a will and loses capacity, their estate would be distributed according to intestacy laws. However, these laws may not align with the individual’s true wishes. The Court of Protection can intervene to create a will that better reflects what the person would have intended.

  2. Significant Changes in Circumstances – If the individual made a will many years ago and their financial or personal situation has changed dramatically, the court can amend the will to reflect their current assets and relationships.

The Court’s Decision-Making Process

When reviewing an application for a statutory will, the court carefully considers:

  • P’s past and present wishes (even if they lack full capacity, they may still express strong preferences).

  • Expert medical and legal reports on P’s condition and ability to understand the will.

  • The impact on potential beneficiaries and the fairness of the proposed changes.

  • All available financial records and documents to ensure transparency.

A court-appointed independent visitor or medical expert may assess P and gather their opinions, even in simple terms. The goal is to safeguard P’s estate and ensure that any will reflects their best interests rather than the personal interests of those making the application.

Recognising and Preventing Financial Abuse

Unfortunately, financial abuse is a growing concern, particularly among vulnerable individuals. Statistics indicate that 1 in 15 adults over 60 in the UK experiences financial abuse annually. Power of Attorney misuse is a particular problem, with 25% of attorneys believing it is acceptable to gain financially from their role.

Red Flags of Financial Abuse

  • Unexplained large gifts or withdrawals from bank accounts.

  • Sudden changes in investment strategies without clear reasoning.

  • Non-family members moving in and gaining financial access.

  • Pressure to change a will or make substantial gifts to certain individuals.

  • Lack of transparency from those managing the person’s finances.

A trustworthy attorney or financial advisor should be able to justify all decisions conflict-free, with supporting records or historical evidence of past behaviors.

How to Protect Vulnerable Loved Ones

  1. Encourage Open Conversations – Talking about estate planning early can prevent disputes and misunderstandings later.

  2. Monitor Financial Activity – Regularly reviewing accounts and legal documents can help identify unusual transactions.

  3. Seek Legal Advice – Consulting a solicitor can help ensure that statutory wills and power of attorney arrangements remain fair and protective.

  4. Involve Trusted Third Parties – Financial advisors, independent visitors, and medical professionals can provide objective oversight.

Estate planning for a vulnerable loved one requires careful thought, legal guidance, and open discussions. While the Court of Protection provides a structured and fair approach to statutory wills, families and professionals must remain vigilant against financial abuse. By taking proactive steps, families can safeguard the assets and dignity of those who can no longer make these decisions themselves.

 
 

Authored with: laura phillips | legal director, irwin mitchell | LPhillips@kingsleynapley.co.uk

lottie leefe