If you find yourself in a position where a loved one is diagnosed with a severe or profound intellectual disability, it may be necessary to appoint a third party to manage their financial affairs. The Mental Health Act makes provision for those with mentally incapacitated loved ones to bring an application for the appointment of an administrator and, while the process is more cost-effective than the process of appointing a curator bonis, it is important to understand the criteria for bringing such an application, the role that the administrator will perform and the costs involved. Here’s what to know.
Legal position on mental incapacity
Our common law principle is that if a person cannot fully understand the consequences of their actions due to a mental illness or disability, that person lacks capacity to perform a specific act, such as signing a contract, and that contract would then be void as a consequence thereof. To lack capacity, it is not necessary for the person to have been formally diagnosed with a mental illness, nor is it a requirement that the other party to the contract be aware of the condition. Having said that, it’s important to bear in mind that lack of mental capacity does not necessarily mean that the person has no autonomy over their affairs, but rather that both clinical and legal factors should be considered to determine the extent of the person’s condition.
The definition of mental incapacity
In terms of the Mental Health Care Act, a ‘mental illness’ is defined as a ‘positive diagnosis of a mental health-related illness in terms of accepted diagnostic criteria made by a mental health care practitioner authorised to make such diagnosis’. The Act further makes provision for the appointment of an administrator to care for and administer the property of such a person. However, to bring such an application, your loved one must have been diagnosed by a mental health care practitioner which, in terms of the Act, includes a psychiatrist, registered medical practitioner, nurse, occupational therapist, psychologist, or social worker who has been trained in this field.
Diagnosing mental incapacity
When making a clinical assessment of your loved one, your mental health practitioner or specialist will need to make a clinical assessment while keeping legal principles and patient rights in mind. Assessments in the case of complete incompetence are relatively simple, whereas they can become more complicated where your loved one’s ability to make decisions fluctuates from time to time. For instance, your loved one may be able to fully comprehend a simple transaction such as drawing money from an ATM but be unable to comprehend the structuring of a complex estate. This means that it is important that your loved one’s ability should be considered in relation to each specific task. As mental incapacity is often not clear-cut and is generally case-dependent, knowing when to intervene and appoint an administrator to manage a loved one’s affairs can be difficult.
The role of the administrator
The primary role of the administrator is to act in the best interests of the mentally incapacitated person and to assist them in managing their affairs. To this extent, our law recognises that the mental capacity of the patient may differ from day to day depending on the diagnosis and that the administrator’s function should be proportionate to the patient’s mental health status, keeping in mind that the patient’s needs may change as and when the illness progresses. This means that the administrator is required to consult with the patient on all decisions where possible and to ensure that the privacy and dignity of the patient are respected. The administrator is also required to keep detailed records and accounts and to ensure that the patient’s assets are not exposed to too much risk, keeping in mind that the role of the administrator would be to assist your loved one in varying degrees according to his mental capacity. Further, the administrator would be required to consult with your loved one regularly in the management of his affairs.
Anyone over the age of 18 is entitled to bring such an application to the Master, keeping in mind that the application must be in writing and under oath. Generally speaking, it is the spouse or close family member of the patient who brings the application but, in circumstances where the applicant is not the next of kin, the application will need to include reasons as to why that person is bringing the application as well as all steps taken to locate the patient’s family members.
Requirements for the application
In order to bring an application for administrator, it must be proved that the mentally incapacitated person meets the criteria set out by the Mental Health Care Act in terms of diagnosis and medical evidence. The applicant will need to provide medical certificates and reports by at least two mental health care practitioners in support of the application, and this evidence must clearly indicate that the person cannot manage their own affairs as a result of the mental illness or disability. The applicant will further need to include details of the patient’s assets, property, and income, and provide details of the person they feel would be best suited to manage the patient’s affairs.
The application process
It is important to note that where the estate of the mentally incapacitated person exceeds R200 000 in value or their income is greater than R24 000 per year, the Master will order that an investigation into the person’s estate takes place. The costs of this investigation, which can be no greater than R15 000, are paid from the patient’s estate. Very importantly, the applicant must provide proof that the patient has received a copy of the application. This is to ensure that no malicious applications are brought and to ensure that the patient’s rights are protected. Once satisfied with the medical evidence and investigation, the Master will provide the administrator with authority to manage the patient’s affairs.
The duties of the administrator
It is important to appreciate that the appointment of an administrator is an infringement of a personal right and, as such, the administrator has an onerous duty to ensure that they look after the patient’s financial interests and consults with them regularly in making decisions to the extent that the patient has capacity, while at the same time ensuring that the patient’s dignity, privacy and autonomy are respected. Further, the administrator is required to keep detailed records of their administration of the patient’s financial affairs and must lodge all accounts with the Master on a regular basis. Effectively, the administrator takes control of the patient’s assets and property with a view to ensuring that they are managed and protected accordingly.
If you’re unsure whether to bring an application on behalf of a loved one or when the most appropriate time is, our advice is to seek the guidance of a medical practitioner who is experienced in this field. Your loved one’s financial advisor should also be able to give you insight into the financial affairs that need to be managed and the extent to which intervention would be required.
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