A Deputy is appointed by the Court of Protection to manage financial matters on behalf of a person who is unable to do this directly. A Deputy can be appointed to act on behalf of an adult or a child if it is likely that the child will continue to lack capacity when he or she reaches 18 years of age.
We act for many families who require the support of a Deputy, particularly when they are likely to receive significant funds from a compensation payment derived on the settlement of a Personal Injury or Clinical Negligence claim.
Compensation payments are awarded to support the injured person by providing funds to pay for their equipment, housing, case management and other care needs. In some cases an injured party may receive 100% of the compensation they are claiming.
Frequently however there is some compromise on settlement and so the compensation ultimately received may not be sufficient to meet the entirety of the injured person’s on-going needs. It is important therefore that those funds are properly managed to ensure that expenditure is sustainable and that the funds do not run out during the injured person’s lifetime.
I am often asked by families whether they should take over the role of Deputy for their child, spouse or other family member on settlement. A change in Deputy always requires approval from the Court of Protection and there has, in recent years, been a reluctance from the Court to appoint lay Deputies to manage funds that are significant.
The Court must be satisfied that the fund is managed properly and that decisions are made in the injured party’s best interests. There are many matters that a Deputy has to address and the post-settlement period can be especially involved and complicated. Some of the matters that a Deputy will have to undertake are as follows:-
- Take formal investment advice on the fund to ensure sustainability;
- Purchase a property for the injured party and undertake significant adaptation or building works (including being involved in the supervision of the works, choice of contractor and dealing with any potential disputes that arise);
- Consider an application for a Disabled Facilities Grant (if appropriate);
- Ensure that any property which is purchased is properly protected with HMLR and that all necessary restrictions and trust deeds are in place;
- Undertake a welfare benefits review and ensure that all benefits and state support is being claimed by the injured party;
- Work with the care team to set up an affordable and workable care structure;
- Consider the recruitment of carers including setting up a payroll and managing all aspects of PAYE, employment contracts and employee management;
- Consider whether tax is due on any income generated on the injured person’s fund and file a tax return with HRMC;
- Take advice to ensure that any investments are structured in a tax efficient manner;
- Keep records of all best interests decisions and any financial transactions;
- Report to the Court of Protection and OPG on an annual basis;
- Consider whether the injured party will require a Will or if an application for a Statutory Will should be made;
- Have regard to the principles of the Mental Capacity Act 2005 when undertaking his duties as Deputy and ensure that all decision and actions are undertaken within the auspices of the MCA 2005.
The above list is not exhaustive and there are numerous other matters that might arise. In light of the complexities that are frequently encountered by a Deputy it is very important that an injured person’s fund is managed properly.
As professional Deputies, we have significant experience in managing Deputyships successfully whilst ensuring that all necessary safeguards, regulatory and transactional matters are complied with. It is important to have a system of support in place for the effective management of an injured person’s fund. As professional Deputies, we work with an injured person’s family to ensure that the compensation is protected and applied for the persons benefit. We seek to involve family members in decision making where possible.
It is a sad reality that all too often we are asked to take over from family members who have attempted the process themselves, but have been unable to successfully manage the Deputyship. This sometimes results in the injured person losing out on support if their fund has been mis-managed and there is less money available to apply towards care.
I would always advise that it is sensible to have the support from a professional Deputy. This is especially important during a claim for compensation and in the years immediately following settlement. Once many of the complex matters have been implemented, it may be that a family member might be in a position to take over the Deputyship. However, many families that we work with choose to retain the support of a professional which takes the administrative stresses and pressures away from the family.