3.10 Discharging the Duty to Manage Assets in the Person’s Best Interest: Guidance

1. Introduction

The guidance from the Office of the Public Guardian requires deputies to ‘Demonstrate responsible use of assets rather than asset preservation.’ This reflects the fact that people who lack capacity retain the right to enjoy and benefit from their assets and have the right to expect that someone acting in their best interest will seek to maximise their assets in all reasonable ways.

The Mental Capacity Act 2005 (MCA) does not define the term ‘best interest’ and identifying which course of action is in someone’s best interest can be difficult. This guidance provides detail about what needs to be considered in order to fulfil the duty to manage a person’s assets in their best interest and processes to follow in a range of circumstances.

2. Making a Best Interest Decision

When seeking to make a decision in someone’s best interest, the detailed guidance on best interest decision making should be read and followed. This will clarify which types of decision can be made by a single person and which need the involvement of a best interest decision making meeting, an Independent Mental Capacity Advocate or the Court of Protection. In each case though, the following factors must be taken into account:

• encourage participation by doing whatever is possible to help the person take part in making the decision;
• identify all relevant circumstances by identifying all the things the person who lacks capacity would consider if they were acting for themselves;
• find out the person’s views, wishes and feelings, values and beliefs whether these have been expressed verbally, in writing or through their behaviour;
• avoid discrimination by making assumptions based on age, appearance, condition or behaviour;
• consider whether the person might regain capacity and if so, whether the decision can be delayed;
• consult others including the person’s family, friends or carers.

In doing this, conflicting issues may come to light which must be carefully weighed against each other. People who lack capacity are not immune from moral dilemmas and those making decisions in their best interest must seek ways through these dilemmas on their behalf. For example, when considering investment of someone’s capital, some options may offer the prospect of a higher rate of return than others and it may seem to be in the person’s best interest to gain the greatest financial benefit from their capital. However, if the person, when they had capacity, had held moral objections to the businesses it was now proposed s/he invest in, it could in no way be argued to be in his / her best interest to override their beliefs and values for financial gain. In another example, a homeowner entering residential care may have assets above the capital threshold when the value of the house is taken into account and so needs to fund his or her own care. It is known from their past expressed views that s/he wished to leave the house to his / her children but it is also known that s/he abhorred debt. If the person had capacity, sooner or later s/he would have to face the unpalatable truth that s/he could only leave the house to the children by going deeply into debt. Working out what is in the person’s best interest in a case such as this involves the careful consideration of which of the wishes they would pursue and which they would sacrifice.

3. Securing Benefits Check

When Hull City Council initially becomes an appointee or deputy for someone, the lead officer in Shared Services will refer the person to the Welfare Rights Team for a benefits check to make sure all of the state benefits the person is entitled to are being claimed. This should be repeated if the person’s health condition significantly worsens or when their capital either exceeds or falls below certain trigger points – £6,000, £10,000 and £16,000.

4. Management of Liquid Assets

Liquid assets should be managed in a way which offers the best balance between accessibility and growth. The person should be able to access the cash they need to meet both their day to day needs and planned purchases.

Upon receipt of the Court order granting deputyship, a representative of Shared Services will immediately notify any banks with which the person holds an account to notify them of the Court order and will follow the bank’s process for transferring access to the deputy’s representatives.

The person should expect the best rate of return possible on their cash savings. At their annual review, an annual spending plan should be devised which identifies what the person needs for day to day expenses, which major purchases s/he wishes to make in the forthcoming year and how these are to be funded. If a person subject to appointeeship wishes to save for a purchase, cash can be held on their behalf by the Shared Services cash and banking section. If someone subject to deputyship has money left over after their day to day expenses have been met, it should be invested in the way which most benefits the person. Based on their annual spending plan, this could be in a low interest instant access account, a higher rate account which requires notice of withdrawal or a longer term investment which cannot quickly be liquidated. Bank accounts or investment accounts must be in the person’s own name with the deputy named as such and any signatories identified clearly, following the bank’s own process for such. The person’s funds must be kept separate from the funds of the deputy or any other party. It is not lawful to hold substantial sums for someone subject to deputyship in any account other than their own.

5. Management of Investments

The making and management of long term investments should only be made after receiving independent financial advice on what to invest in. The nature of that financial advice will depend upon the nature and size of the investment. For smaller sums, a single consultation with an independent financial advisor will be sufficient while for larger sums, or to manage complex portfolios, a financial manager or stockbroker may be required. When making the decision about the type of support required, a key question is whether the potential benefit to the person justifies the cost of fees.

6. Management of Property

6.1 Single property, owner occupied

If someone for whom the local authority holds deputyship owns their own home and lives in that home, it is the deputy’s responsibility to make sure it is properly insured, well maintained and safe to occupy. Responsibility for these tasks has been delegated to the lead officer in shared services.

When the deputyship is order is initially received, an officer from shared services should visit the property. Sensitivity must be shown to the person subject to deputyship and the visit should be a joint one with someone the person knows and trusts. The officer from shared services should take the following steps to ensure the home is safe and habitable:

• carry out a superficial visual check of the property, such as a reasonable person would periodically carry out in their own property, for signs of disrepair such as broken windows, fixtures or fittings, damp etc;
• arrange for a suitably qualified person to check gas fires, boilers and appliances;
• ensure working smoke alarms and a carbon monoxide detector are fitted and working. If the person lacks the ability or the capacity to respond appropriately to either alarm sounding, a request should be made via the social worker, to telecare for a lifeline link;
• ensure appropriate buildings and contents insurance is in place. A minimum of three quotes should be obtained to ensure best value;
• if the person has any physical disability or impairment, refer to occupational therapy, via the social worker for an assessment to be carried out and provision of aids, equipment or adaptations to be made;
• review any mortgage agreement and ensure repayments are up to date and secure deeds of ownership;
• gather details of all household bills such as utility bills etc. Obtain a minimum of three quotes from utility providers to ensure the person is receiving the most favourable rate.

Two further visits should be carried out per year and the steps outlined above repeated.

6.2 Person owns multiple properties

The steps outlined above should be followed in respect of the property the person is living in and consideration given to how to manage other properties in the person’s best interest. This will vary according to each individual’s circumstances, but may include the following scenarios:

• person owns the house they live in and a holiday property which they regularly use but do not rent as a holiday let. In a case such as this, both properties should be managed by following the steps outlined in 6.1;
• person owns the house they live in and other properties which are let, either as holiday lets or as long term lets. In a case such as this, a property management company should be engaged to manage any other properties owned by the person;
• person owns the house they live in and other properties which are unoccupied. In a case such as this, a best interest meeting should be held to consider whether it is in the person’s best interest to let or sell the unoccupied properties. If the decision is to sell, the deputyship order should be examined to ascertain whether the deputy has the Court of Protection’s authorisation to sell. If s/he does not, an application should be made to the Court of Protection to dispose of the property. If s/he does, an estate agent and solicitor should be engaged to manage the sale. A minimum of three quotes must be obtained to ensure the person receives best value. If the decision is to let, a property management company should be engaged to manage the letting.

6.3 Person owns single or multiple properties which are unoccupied

A best interest meeting should be held to consider whether it is in the person’s best interest to let or sell the unoccupied properties. If the decision is to sell, the deputyship order should be examined to ascertain whether the deputy has the Court of Protection’s authorisation to sell. If s/he does not, an application should be made to the Court of Protection to dispose of the property. If s/he does, an estate agent and solicitor should be engaged to manage the sale. A minimum of three quotes must be obtained to ensure the person receives best value. If the decision is to let, a property management company should be engaged to manage the letting.

7. Disposal of other Major Assets

Someone subject to deputyship may have a number of other major assets such as jewellery, valuable furniture, antiques or art. A major asset is something with a sale value of more than £1,000. The overriding principle when managing someone’s assets is that the deputy must act in the person’s best interest (see Section 2, Making a Best Interest Decision). When considering whether to keep or dispose of a major asset, there are a number of points to consider.

• Does the asset hold sentimental value to the person or a close family member?
• Is the asset named as a bequest in the person’s will?
• Is storing the item likely to lead to a loss in value, or is the cost of storage likely to exceed the item’s worth?
• Would the person gain greater benefit from having the money to be gained from selling the item?

If, having regard to the points listed above, the decision appears clear cut the deputy or his representative may make the decision. If it is not clear where the best interest of the person lies, a best interest decision making meeting should be held.

8. Ending a Tenancy

Ending the tenancy of someone who lacks capacity is not straightforward. See Joint Protocol on Ending the Tenancy of Someone who Lacks Capacity.

9. Seeking Independent Financial Advice

Independent financial advice may be provided by a service which is free at the point of access such as the Money Advisory Service or by an independent advisor who will charge a fee. Independent Financial Advisors must have a level 4 financial planning qualification and hold a Statement of Professional Standing (SPS). However, not all FCA-regulated advisers will have an in- depth understanding of the care and support system unless they have chosen to specialise in this area of advice.

Where an adviser chooses to specialise, then specific additional regulatory qualifications and permissions from the FCA are required. This is the case for advising on long term care insurance and care fees planning and other areas such as equity release advice. These require the adviser to have additional examinations such as a certificate in long-term care insurance, CeLTCI, CF8, and for equity release ER1 and CeRER. A list of the qualifications that a regulated financial adviser must have depending on the areas they advise on and can be found on the FCA’s website.

It is also important to note that not all regulated advisers have training or will necessarily have an understanding with regard to the MCA. The FCA makes reference to the MCA and related guidance only in relation to debt and regulated credit advice. Good practice might be to ensure any regulated advisers within an information and advice service have a good understanding of the impact of the MCA.

Independent financial advice should be sought on behalf of the person when:

• s/he is paying for care privately or self funding;
• considering permanent placement in a care home;
• considering options on how to pay for care and support;
• considering how long their money will last;
• entering into a financial contact for example top ups, deferred payment agreement;
• they, or a close family member, friend or carer requests financial information and advice;
• considering a major investment of £50,000 or more.

10. Keeping Property in Good Repair

The Office of the Public Guardian standards for Public Authority Deputies ask that deputies regularly review someone’s property and keep it in good repair but doesn’t specify what ‘regularly’ means. If someone is living in their home and has regular visits from support workers, the deputy should ask the support workers to keep him/her informed of any repairs which become necessary. S/he should also make sure servicing of gas appliances takes place annually and should visit, or delegate someone suitable to visit once a year to find out whether major items such as the roof, the electrical wiring or the damp proofing require the attention of a specialist.

f no one is living at the property, it should be secured and the windows boarded over. The deputy or their delegate should visit every three months to make sure the property hasn’t been vandalised, illegally occupied or suffered damage such as water ingress. A best interest meeting should be held to discuss whether keeping the property boarded up, renting it out or selling it is in the person’s best interest. If the agreement is to rent it out, a property management company should be appointed to manage the letting. If the agreement is to sell, an application to the Court of Protection for authorisation will usually be necessary.

11. Disbursements Available to Pay for Asset Management

Rule 156 of the Court of Protection rules provides that, where the proceedings concern someone’s property and affairs, the general rule is that costs of the proceedings shall be paid by that person or charged to his estate.

The Court allows fixed costs to be claimed by a Public Authority Deputy from the person’s own funds. For the financial year 2017/18, these are as follows:

• work up to and including the date upon which the court makes an order appointing a deputy for property and affairs – an amount not exceeding £745;
• annual management fee, payable on the anniversary of the court order:
  • a) For the first year – an amount not exceeding £775
  • b) For the second and subsequent years – an amount not exceeding £650
  • c) Where the net assets of the person are below £16,000, the annual management fee should not exceed 3.5% of the person’s net assets on the anniversary of the court order appointing the local authority as deputy
• annual property management fee. This covers work involved in preparing property for sale, instructing agents, conveyancers, etc. or the ongoing maintenance of property. It also includes management and letting of a rental property or properties where the person is a tenant – an amount not exceeding £300
• the fees charged by estate agents, conveyancers, independent financial advisors etc. are payable separately, and in addition to the deputy’s fees listed above;
• preparation and lodgement of a report or account to the Public Guardian – an amount not exceeding £216;
• preparation of a Basic HMRC income tax return (bank or NS&I interest and taxable benefits) on behalf of the person – an amount not exceeding £70;
• preparation of a Complex HMRC income tax return (bank or NS&I interest, taxable benefits, small investment portfolio) on behalf of the person – an amount not exceeding £140;
• public authority deputies are also allowed the fixed rate of £40 per hour for travel costs.