The decision to become a property and financial affairs deputy for a relative, who has lost capacity, is not one that should be taken lightly. It involves serious responsibilities and commitment. Non professional deputies are not entitled to be paid for their role as deputy, unless the order provides for this. You can recover reasonable out of pocket expenses, although usually this is no more than £500 per annum.
If you make an application to become a deputy for a relative, the Court will decide whether you are suitable. The decision will be based upon whether you are reliable, trustworthy and have the appropriate level of skill and competence to make financial decisions on behalf of your relative.
Before making the application, you should consider the following:-
- The deputyship can last for a number of years. If the order is made for an indefinite period, it is likely to continue until the death of your relative or until their capital resources run out. Do you have the time and good health to undertake the role of deputy now and in the foreseeable future?
- How well do you manage your own money? If you have difficulty managing your own finances, you may have difficulty managing the finances of your relative too.
- When making decisions on behalf of your relative, you need to take into account the principles in Section 1 of the Mental Capacity Act 2005 and the Code of Practice. Your decisions must be made in your relative’s best interests, rather than what you think is best for them, or what is in your best interests.
- You need to involve your relative in the decision making, as far as they are able to participate.
- You need to be aware of the limits of any deputyship order, particularly with regard to the making of gifts. If your relative suffers any loss, as a result of a failure in your duty, or you exceed the powers given to you under the terms of the deputy order, or you make unauthorised gifts, you can be personally liable for any loss caused.
- It is extremely important that you keep financial records and produce an annual report to the Office of the Public Guardian, who will supervise your activities. If you are found to be acting contrary to your relative’s best interests, you may be removed as deputy.
- You must not benefit from the decisions you make on behalf of your relative, without first obtaining the Court’s authority.
- It is extremely important that you keep your relative’s finances separate from your own. This means that savings, investments and property should be held on behalf of your relative, and not in your own name. If there is any reason why an account or investment cannot be held in this way, a Declaration of Trust should be drafted to specify your relative’s interest. This is also important for tax and inheritance purposes.
- If the circumstances justify it, you should seek independent investment advice, on behalf of your relative. This is to ensure that any investments made are suitable and diversified. Investments must be kept under regular review, to ensure that they remain appropriate.
- You will also be required to manage your relative’s estate. In particular, you need to seek tax, welfare and estate planning advice, where appropriate. You also need to budget for them and arrange regular and one off payments, on their behalf.
- If your relative has suffered a personal injury, and received compensation, you may need to set up a care package for them. This could consist of case managers and therapists, as well as carers. You may need to purchase a property, vehicle, or specialist equipment, on their behalf, and arrange for adaptations to be carried out, to meet their specific needs.
If you require assistance in applying to become a deputy yourself, our experienced Court of Protection team can advise you on the correct procedure and help you with drafting the relevant documents. If you feel that your relative would benefit from a professional deputy, we can arrange this for you. We have a court approved panel deputy in our team.