3.13 Discharging the Duty to Manage Assets in the Person’s Best Interests: Guidance

1. Introduction

Deputies should ‘demonstrate responsible use of assets rather than asset preservation.’ This reflects the fact that people who lack mental capacity retain the right to enjoy and benefit from their assets, and have the right to expect that someone acting in their best interests will seek to maximise their assets in all reasonable ways.

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

2. Making a Best Interests Decision

When seeking to make a decision in someone’s best interests, the guidance in Best Interests Decision Making chapter should be followed. This will clarify which types of decision can be made by a single person and which need the involvement of a best interests 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 adult take part in making the decision;
• identify all relevant circumstances, including all the factors the adult who lacks mental capacity would consider if they were acting for themselves;
• find out the adult’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 the adult’s age, appearance, condition or behaviour;
• consider whether the adult might regain mental capacity and if so, whether the decision can be delayed;
• consult others including the adult’s family, friends or carers.

In doing this, conflicting issues may come to light and these must be carefully weighed against each other. Adults who lack mental capacity are not immune from moral dilemmas, and those making decisions in their best interests must seek ways through these dilemmas on their behalf. For example, when considering investment of a person’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 interests to gain the greatest financial benefit from their capital. However, if the person, when they had mental capacity, had held moral objections to the businesses it was now proposed they invest in, it could in no way be argued to be in their best interests 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 their own care. It is known from their past expressed views that they wished to leave the house to their children but it is also known that they disliked debt. If the adult has mental capacity, sooner or later they would have to face the unpalatable truth that they could only leave the house to the children by going deeply into debt. Working out what is in the person’s best interests 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 an adult the lead officer in Shared Services will refer the person to the Welfare Rights Team for a benefits check to make sure they are receiving all of the state benefits they are entitled to. This should be repeated if the adult’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 adult 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 contact any banks with which the adult 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 adult 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 adult needs for day to day expenses, which major purchases they wish 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 an adult subject to deputyship has money left over after their day to day expenses have been met, this should be invested in the way which most benefits them. 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 adult’s own name with the deputy named as such, and any signatories identified clearly, following the bank’s own processes. The adult’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 an adult 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. 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 adult justifies the cost of fees.

6. Management of Property

6.1 Single property, owner occupied

If an adult 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 adult subject to deputyship, and the visit should be a joint one with someone the adult 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 smoke alarms and a carbon monoxide detector are fitted and working. If the adult 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 adult 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 Adult owns multiple properties

The steps outlined in Section 6.1 should be followed in respect of the property the adult is living in and consideration given to how to manage other properties in the their best interests. This will vary according to each individual’s circumstances, but may include the following scenarios:

• adult 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 Section 6.1;
• adult 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 adult;
• adult owns the house they live in and other properties which are unoccupied. In a case such as this, a best interests meeting should be held to consider whether it is in the adult’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 they dos not, an application should be made to the Court of Protection to dispose of the property. If they do have authorisation, an estate agent and solicitor should be engaged to manage the sale. A minimum of three quotes must be obtained to ensure the adult receives best value. If the decision is to let, a property management company should be engaged to manage the letting.

6.3 Adult owns single or multiple properties which are unoccupied

A best interests meeting should be held to consider whether it is in the adult’s best interests 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 they do not, an application should be made to the Court of Protection to dispose of the property. If they do have authorisation, an estate agent and solicitor should be engaged to manage the sale. A minimum of three quotes must be obtained to ensure the adult 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

An adult 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 an adult’s assets is that the deputy must act in the their best interests (see Section 2, Making a Best Interests Decisions). 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 adult or a close family member?
• Is the asset named as a bequest in the adult’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 adult 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 their representative may make the decision. If it is not clear where the best interests of the adult lies, a best interests decision making meeting should be held (see Best Interests Decision Making chapter).

8. Ending a Tenancy

Ending the tenancy of an adult 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 and Pensions 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 Financial Conduct Authority (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 advisor chooses to specialise, 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 advisors have training or will necessarily have an understanding with regard to the Mental Capacity Act (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 adult when:

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

10. Keeping Property in Good Repair

The Office of the Public Guardian Standards for Deputies ask that deputies regularly review someone’s property and keep it in good repair but doesn’t specify what ‘regularly’ means. If an adult 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. They 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 interests meeting should be held to discuss whether keeping the property boarded up, renting it out or selling it is in the adult’s best interests. 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 an adult’s property and affairs, the general rule is that costs of the proceedings shall be paid by the adult or charged to their estate.

The Court allows fixed costs to be claimed by a Public Authority Deputy from the person’s own funds. See Fixed Costs in the Court of Protection.