When 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 allows for an application to appoint an administrator, a process that is generally more cost-effective than appointing a curator bonis. However, it is essential to understand the application criteria, the administrator’s responsibilities, and the associated costs. Here’s an overview to help you navigate this important process.
The definition of mental incapacity
The Mental Health Care Act defines ‘mental illness’ as a diagnosis of a mental health-related condition made using accepted criteria by an authorised mental health care practitioner. The Act allows for appointing an administrator to manage the property of such an individual. To apply, the diagnosis must be made by a mental health care practitioner, which includes professionals such as psychiatrists, registered medical practitioners, nurses, occupational therapists, psychologists, or trained social workers, as specified under the Act.
Diagnosing mental incapacity
When assessing your loved one’s mental capacity, the practitioner must balance clinical evaluation with legal principles and patient rights. Assessments are straightforward in cases of complete incompetence but more complex when your loved one’s decision-making ability fluctuates. For example, they may understand a simple transaction like withdrawing cash from an ATM but struggle with the complexities of estate structuring. Mental capacity should therefore be evaluated in relation to each specific task. As mental incapacity is often case-dependent and not always clear-cut, determining when to appoint an administrator can be challenging and requires careful consideration.
The role of the administrator
The primary role of an administrator is to act in the best interests of the mentally incapacitated person, assisting them in managing their affairs. Recognising that mental capacity can fluctuate, the administrator’s responsibilities should align with the patient’s mental health status, adapting as their condition changes. The administrator must consult with the patient on decisions where possible, respecting their privacy and dignity. They are required to maintain detailed records, ensure the patient’s assets are managed prudently, and avoid exposing them to undue risk. Importantly, the administrator’s involvement should vary based on the patient’s mental capacity, with regular consultations to ensure the patient’s needs and preferences are considered in managing their affairs effectively.
The applicant
Any person over 18 may submit a written, sworn application to the Master. Typically, the applicant is the patient’s spouse or a close family member. If the applicant is not next of kin, the application must provide reasons for their involvement and detail efforts made to locate the patient’s family members before proceeding with the request.
Requirements for the application
To apply for the appointment of an administrator, it must be proven that the mentally incapacitated person meets the criteria outlined in the Mental Health Care Act. This requires medical evidence, including certificates and reports from at least two mental health care practitioners, confirming the person’s inability to manage their affairs. The application must also detail the patient’s assets, property, and income, and recommend a suitable individual to manage their affairs effectively.
The application process
If the estate of a mentally incapacitated person exceeds R200,000 or their annual income surpasses R24,000, the Master will require an investigation into the estate, with costs capped at R15,000, paid from the estate. Applicants must prove the patient received a copy of the application to prevent malicious filings and safeguard their rights. Upon reviewing the medical evidence and investigation, the Master will authorize the appointed administrator to manage the patient’s affairs.
The duties of the administrator
The appointment of an administrator infringes on a personal right, placing a significant duty on the administrator to protect the patient’s financial interests while respecting their dignity, privacy, and autonomy. The administrator must consult the patient on decisions, when possible, maintain detailed financial records, and regularly lodge accounts with the Master. They are entrusted with managing and safeguarding the patient’s assets and property to ensure these are handled responsibly and in the patient’s best interests.
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Created by Alex Odendaal, CFP® professional