The role of the financial deputy – 20 things they should be doing
When it is determined that a client lacks capacity to make financial decisions, the Court of Protection will appoint a deputy – whether a friend or family member, or a professional deputy – to help the individual manage their financial affairs.
As detailed in our guide to determining capacity and the roles of a deputy in decision-making here, there are a number of responsibilities and duties for a deputy to adhere to which family members should be aware of.
What should a financial deputy do?
We have identified 20 tasks that a financial deputy should be undertaking for you or someone close to you who lacks financial capacity.
A financial deputy should:
1 – Make applications to and liaise with the Court of Protection and the Office of the Public Guardian (OPG) where necessary.
The OPG (which is independent of the Court of Protection) provides a supervisory function and is responsible for the supervision of the deputy. Both the Court of Protection and the OPG charge fees.
Typically in larger compensation cases with a professional deputy there will be general supervision if assets are worth more than £21,000 or minimal supervision if less.
2 – The OPG introduced Deputy Standards (OPG DS) in July 2015 directed specifically at professional deputies:
“The standards clearly set out what is expected of professional and public authority deputies and provide an important checklist of actions and behaviours every deputy should follow. Deputies will be assessed against the standards either through face-to-face assurance visits, assurance reviews conducted by telephone or during case reviews”.
Accordingly, the deputies will be required to make themselves available for such assurance visits.
3 – Prepare annual accounts/reportsfor the Office of the Public Guardian.
4 – Pay an annual surety bond (also called a ‘security bond’). The bond is insurance that protects the assets of the person whose affairs and property the deputy is managing.
5 – Complete tax returns and make payment to the HM Revenue & Customs as necessary.
6 – Deal with requests for capital expenditure such as purchasing an adapted vehicle or specialist equipment as an example.
7 – Set appropriate budgets and make regular payments as appropriate (standing orders, direct debits).
8 – Liaise with an Independent Financial Adviser to invest the compensation and consider the investment proposals, as the Deputy Standards require that a review of savings and investment portfolio is conducted at least once a year to demonstrate a responsible use of assets, rather than simply asset preservation.
With the current volatility in the market initially due to BREXIT, then the “Trump factor”, and now the unprecedented impact of the coronavirus pandemic, there is uncertainty around investments which is predicted to continue for some time. Therefore, the investment portfolio and the risk profile should be reviewed regularly in the context of the current economic climate.
9 – Oversee the care agency/arrange the employment and retention of direct-hire carers and other employed staff, and liaise as appropriate with the case manager.
10 – Oversee and arrange payment of national insurance contributions and PAYE tax in respect of any employee’s wages (e.g. carers).
11 – Ensure that the care and therapeutic regimes continue to meet the client’s needs, and are good value for money and appropriate to the level of funds available.
12 – Liaise with the client’s extended family, case manager, advocate, support workers and other parties as appropriate and in accordance with the “best interests” criteria record the client’s feelings, wishes, beliefs and interests, both past and present.
13 – Ensure that the client receives the correct state benefits, council tax benefits and exemptions, housing benefit and local authority/public funding for care. The Deputy Standards require the deputy to undertake this review at least once a year.
14 – Pay bills, fees and regular expenses and ensure scrutiny of payments of any liabilities attaching to the client.
15 – Estimate/project deputyship annual management fees in accordance with Practice Direction B.
16 – Submit a bill of costs to the court for assessment at the end of each deputyship year.
17 – Ensure appropriate buildings and contents insurance are in place and familiarise themselves with the terms of the policies.
18 – Purchase or rent an appropriate home for the client and regularly review the condition of the property to ensure it is adequately maintained.
19 – Regularly review the suitability of the property for the client and identify whether any adaptation is required to meet the disabled needs; manage the adaptation project in collaboration with the specialist architect, project manager and contractor.
20 – It is probable that the mechanism of settlement will be a combination of a lump sum and a Periodical Payment Order (PPO). PPOs are paid on an annual basis and linked to an appropriate index.
The professional deputies will thus be involved on an annual basis in (1) checking the calculations of the payer to ensure that any revised payment accurately reflects the changes in the index; (2) producing a Proof of Life to the payer which typically requires a medical certificate from one of the medico-legal experts during the course of the litigation or the client’s GP post settlement, and (3) if the PPO is stepped, ensuring that the terms of the Settlement Order are executed and the correct payment is made.
If you are looking to appoint a professional deputy, or have any questions about how a financial deputy should be looking after an individual’s financial affairs, please contact our specialist Compensation Protection Team today.