Frequently Asked Questions

My daughter has cerebral palsy caused by negligence in the management of her birth and the NHS have admitted liability. I have been advised that a deputy must be appointed for my daughter to manage the compensation money for her. Can I act as deputy for her or do we need a professional deputy?

The Court of Protection may agree to appoint you as deputy but you will need to think carefully about whether you want to take on this role.

As deputy, you must open a deputyship account in your daughter’s name and you must ensure that you do not mix her money with your own money. Every decision you make must be in your daughter’s best interests. The work of a deputy is supervised by the Office of the Public Guardian (OPG) and you must file a report and full accounts with the OPG each year.

You will be responsible for making sure that your daughter claims all benefits due to her. You must keep proper accounts in respect of all expenditure on her behalf. You will directly employ her carers and will be responsible for the payroll. You will also deal with her tax returns once there is money invested on her behalf.

You will have all the responsibilities of an employer. If you are managing a building project, you have a responsibility to ensure that the work is carried out to a good standard and within budget. At all times you will need to anticipate future expenditure and work to a budget to ensure that there are always sufficient funds available to meet all the expenses.

Apart from the huge amount of work and responsibility involved, the main difficulty for a parent acting as deputy are the areas where a conflict of interest arises as follows:

1. Once the case has settled, the deputy must calculate the parental care payments due to the parents to compensate them for the care they provide. These calculations take into account the hours of care provided over and above the care that the child would have needed if not disabled, the percentage liability recovered in the claim and a deduction for notional tax and insurance. There is a conflict of interest for the parent in working out the amount due themselves.
2. After settlement of the case, the deputy will agree a personal allowance to be paid to the parents to cover all additional expenses due to the disability which are not covered by DLA. Again a conflict of interest arises between parent and child in calculating the amount due.
3. Very often the child’s money is used to purchase a suitable property and adapt it for the child’s needs. This also gives rise to a conflict of interest between parent and child as the parents will live in the property too but the money must only be used in the child’s best interests. The parents may choose a property which does not entirely meet the child’s needs. Also the deputy must decide how much to spend on the property and how much to keep back for other needs such as therapies and equipment. This can be a difficult decision for a parent if they want to buy a property that a professional deputy may consider too expensive.
4. Other areas where a conflict of interest arises include agreeing how much the child should contribute towards family holidays and items of expenditure such as furniture for the child and the family car.

The OPG analyse the annual accounts and raise queries about any expenditure that may not be in the child’s best interests. If they have concerns about the type of issues listed above, they will recommend that a professional deputy is appointed instead of the parent. They will also ask for any disputed sums to be repaid by the parent to the child.

During the first few years after a case settles, the deputy is dealing with a lot of difficult issues and a huge amount of expenditure. However, once a care team is established, the property adapted, and the surplus funds invested, it may be appropriate at that stage for the parents to take over the deputyship themselves if they wish to do so.

My mother has dementia and is moving to a care home. I need to sell her house but she is too confused to deal with this herself or to set up a power of attorney appointing me to do it for her. What can I do?

If your mother lacks sufficient mental capacity to manage her financial affairs, then the only option is to apply to the Court of Protection (COP) to be her finance deputy.

The COP will require medical evidence confirming that your mother lacks capacity. They will also ask for a lot of information about your mother’s personal circumstances and finances. They also check that you are a suitable person to act as deputy. There is a court fee of £400.

You will have to explain who visits your mother and provide the names of other people close to your mother. These people will be notified of the application and will have an opportunity to make objections to the court if they do not think that you should be the deputy.

Once the order is made, you have to take out insurance cover which protects your mother’s money against any wrongdoing on your part. The deputyship order gives you legal authority to deal with your mother’s finances, including selling her house and dealing with her bank accounts and investments.

I am a solicitor specialising in PI work. What advice should I give clients about PI trusts?

Advice on PI trusts must be given to any client who receives means tested benefits or local authority funding (eg living in supported accommodation or a care home) and to any client who may claim benefits or LA funding in the future.

Clients have a period of one year from the date of the first interim payment (not from the date of settlement) during which the damages they receive are disregarded for the purposes of means tested benefits and local authority funding (known as the one year disregard).

Once the year has expired, if the client has over £6,000 they must notify the DWP of the change in their circumstances and their benefits will be reduced. If they have more than £16,000 they will lose their entitlement to benefits completely. If they have more than £23,250 they will be self funding for supported living or care home fees.

Therefore as soon as the first interim payment is made, the client should be advised as to the benefits of placing the money into a PI trust. It can take several months to set up the trust so steps should be taken early on during the one year disregard if the client is likely to lose benefits or funding when the year ends.

I have an autistic adult son who has a learning disability and does not speak. He does not have sufficient mental capacity to manage his finances. His social worker has told me that he needs a power of attorney.

If your son does not have the capacity to understand the power of attorney deed then he cannot set up a power of attorney. The only option is for you to apply to be appointed as his deputy.

However, we would need to explore what it is you need the deputyship order for. A deputyship order is not required to deal with your son’s benefits as the DWP can make you his appointee and that means that you deal with his benefits for him.

Generally speaking, a deputyship order is not appropriate for dealing with small sums of money.

If your son, is moving into supported living, you may need a short deputyship order to sign the tenancy agreement on your son’s behalf.

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