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Mental or intellectual impairment: When to appoint an administrator

And the process of appointing an administrator to manage your loved one’s financial affairs.

Mental incapacity is often not clear cut and can depend entirely on the type of illness or intellectual disability that the patient suffers from. Knowing when to intervene and appoint an administrator to manage a loved one’s affairs can therefore be a difficult and sensitive decision to make.

Where mental impairment is permanent, such as in the case of brain damage, severe intellectual disability or advanced dementia, making a decision to appoint an administrator should be a relatively easy one. But, circumstances may be such that the condition is temporary – such as in the case of a stroke or accident from which your loved one can recover.

In this article, we explore the circumstances in which you may consider appointing someone to administer your loved one’s financial affairs and the process involved.

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 the capacity to perform a specific action, such as signing a contract, and that contract would then be void as a consequence. It is not necessary for a person to have been formally diagnosed with a mental illness for them to lack mental capacity, nor is it necessary for the other party to the contract to be aware of their mental illness. However, lack of mental capacity does not necessarily mean that the patient has no autonomy and, when assessing your loved one’s medical condition, both clinical and legal factors should be taken into account – keeping in mind that the role of the administrator would be to assist your loved one in varying degrees according to their mental capacity. Further, the administrator would be required to consult with your loved one regularly in the management of their affairs.

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.

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 healthcare 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. To bring such an application, your loved one must have been diagnosed by a mental healthcare 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.

Unlike the appointment of a curator bonis which is a High Court application, the application for the appointment of an administrator can be lodged directly with the Master’s Office in whose jurisdiction the applicant lives. Where the patient’s estate has capital assets less than R200 000 or their income is less than R24 000 per year, the Master can appoint an administrator on application. However, if a patient’s estate is greater than R200 000 or their income more than R24 000 per year, the Master will appoint an interim administrator pending the outcome of an investigation into their affairs, the costs of which are borne by the patient’s estate. Once satisfied, the Master will proceed with the formal appointment of an administrator.

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.

The applicant will also need to confirm that no similar application has been lodged in respect of the same patient, and submit a list of the patient’s assets, liabilities and proof of income. Included in the documents submitted to the Master’s Office should be two recent medical reports on the patient’s condition, and the medical evidence must clearly indicate that the patient is unable to manage their own financial affairs.

Most importantly, the applicant must provide proof that a copy of the application has been provided to the patient and that the patient is aware that the application is being brought. This is to protect vulnerable people against the unscrupulous actions of friends and family members who wish to take advantage of such situations.

If satisfied with the document and the outcome of the investigation into the patient’s affairs, the Master will then appoint an administrator whose job it is to act at all times in the best interests of the patient and with the highest degree of integrity. Keeping in mind that the appointment of an administrator is an infringement of a personal right, 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 the capacity, while at the same time ensuring that the patient’s dignity, privacy and autonomy are respected.

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. They are entitled to acquire moveable or immovable property for the benefit of the patient and to invest money appropriately.

If you’re unsure whether to bring an application on behalf of a loved one or when the most appropriate time would be, seek the guidance of a medical practitioner who is experienced in this field. In addition, your loved one’s financial advisor should be able to give you insight into the financial affairs that need to be managed and the extent to which intervention would be required.

ADVISOR PROFILE

Craig Torr

Crue Invest (Pty) Ltd

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