Member Article

Important guidance for Attorneys and Deputies

Here Sarah Hartley, Director at Malcolm C Foy & Co Solicitors, gives guidance to people appointed as Attorneys or Deputies on what is expected from them by the Courts.

Being an attorney or deputy can be an arduous role. Attorneys and deputies need to be ‘squeaky clean’, and must operate with even greater care than they would with regard to their own personal finances.

There have been a number of cases in the last few years of attorneys exceeding their authority or acting improperly, but many of these cases are a result of attorneys not understanding the boundaries within which they work. They do not set out to break the rules, but through lack of understanding of their position, they go beyond their powers. It is therefore important for all attorneys and deputies to understand exactly what is expected of them, and what they can and cannot do with the assets of a person who has lost capacity (“P”)

Overriding duties of attorneys and deputies

All deputies and attorneys obliged to follow principles of section 1 of the Mental Capacity Act, which are as follows:

• A person is assumed to have capacity, unless it is established that this is not the case
• A person is not to be treated as unable to make a decision unless all reasonable steps have been taken to help him do so without success
• A person is not to be treated as unable to make a decision merely because he makes an unwise decision
• Any act done or decision made must be in the best interests of the person who lacks capacity
• Before taking any action, you must consider whether there are less restrictive ways to achieve the same results

What does ’best interests’ mean?

• You must encourage the P to participate in the decision making process if this is possible
• You must think about P’s past wishes and feelings
• You must consider P’s beliefs and values
• You should take into account the views of other people who are close to P

But P’s past wishes and beliefs are not the overriding factor, the ultimate decision must be based entirely on what is in P’s best interests

Investment of P’s money

As a general rule, attorneys and deputies should obtain independent financial advice about investment of P’s money. How much time and money you expend on this should be dependent on P’s age and the value of their estate, and their financial needs and attitude to risk. Once funds are invested, the investments should be reviewed periodically to check that they are still suitable.

What is not acceptable?

In the case of Re Buckley Mrs Buckley appointed her niece “C” to be her sole attorney. Mrs Buckley subsequently lost capacity, and C therefore stepped in to act as attorney. She then proceeded to:

• Withdraw over £87,000 from Mrs Buckley bank to set up a reptile breeding business, without getting any security for the investment
• Use over £7,500 of Mrs Buckley’s money for her own personal benefit
• Stop visiting Mrs Buckley to check how she was and what she may need
• Withdraw £300 cash daily (the maximum amount from a cash machine) from Mrs Buckley’s account

Thankfully the bank (Nationwide) spotted the irregularity and reported it to the police, who subsequently interviewed C. The matter was ultimately taken to Court, and the Court unsurprisingly found that C had not acted in Mrs Buckley’s best interests. The Court said that the investment in the reptile business was highly unsuitable and they criticised C for not taking proper investment advice. As would be expected, the power of attorney was revoked by the Court and C was removed as attorney.

What points can we take away from Re Buckley?

• Take proper independent, professional advice before making any investments with P’s money
• Think about what is suitable to the circumstances. If P is 80, is would not be suitable to tie his funds to any investment which needs to be invested for over 2 years to return growth
• Make sure your own interests do not conflict with P’s e.g. do not invest P’s money in a business you are involved in, or in property that you or your family intend to live in
• Make all investments with P’s money in P’s own name and not your own
• Limit gifts to those allowed i.e. reasonable gifts on customary occasions. Customary occasions include birthdays, Christmas, weddings, christenings. If you wish to make gifts on other occasions you should obtain the authority of the Court

When you MUST apply to Court to take certain actions

Under the Mental Capacity Act, you must apply to Court to get authorisation for any of the following actions:

• Gifts other than on customary occasions and of reasonable amounts
• Loans to yourself or members of your family
• Investment of P’s funds in your own business
• Sales or purchases of property at less than market value
• Any transactions that suggest a conflict between your own interests and the interests of P

There are often good reasons for wishing to take the above actions, but it is important that you obtain the Courts approval before doing so.

What else should I think about as an attorney / deputy?

• You should consider whether P has made a Will, and if not consider applying for a ‘Statutory Will’. A Statutory Will is a Will approved by the Court for P, who no longer has the capacity to make a Will themselves. The procedure is complicated and expensive, however there are occasions where it is in the best interests of P to apply for a Statutory Will, for example if they have no Will and two children, but have had no contact with one child for years. A Statutory Will could provide that all Ps estate pass to the child she has contact with.
• Is P getting all state benefits they are entitled to?
  • Attendance Allowance – where P needs help with things such as washing, dressing, eating etc or where they need supervision to prevent danger to themselves or others. Current weekly rates are £55.10 at the lower rate and £82.30 at the higher rate. Attendance Allowance is not means tested, which means that you can apply regardless of the value of P’s assets. You can make an application at https://www.gov.uk/government/publications/attendance-allowance-claim-form
  • Disability Living Allowance / Personal Independence Payments – similar to Attendance Allowance, but for those under 65
  • Council Tax Benefit – if P lives alone they can get a 25% discount. Additionally, if they have a ‘severe mental impairment’ they can get a full exemption. To apply you need to write to your local council to explain the reason you are applying for an exemption
• NHS care funding – if P is in a care home and they are paying their own fees, you should be mindful that if their needs indicate a ‘primary health care need’, rather than a need for residential care assistance, they could qualify for NHS care funding, rather than paying for care themselves. You should ask the care home to arrange a ‘Decision Support Tool’ assessment for P, which will be carried out by the NHS to determine whether they should be eligible to make payment for P’s care

Whether you need help in applying for benefits or care fees, or need to make an application to the Court to authorise a gift or statutory Will, we can help. Contact us on Doncaster 01302 340005 or Rotherham 01709 836866 to arrange an appointment if you require any assistance.

Notes above correct as at 19th May 2015. Please seek direct advice from Malcolm C Foy & Co at the time this is needed, to confirm whether any of the above information has changed since the date of publish.

This was posted in Bdaily's Members' News section by Sarah Hartley .