LPA forms are changing from 1 July 2015 – The Law Society

LPA forms are changing from 1 July 2015 – The Law Society.

Time to get to grips with the new forms…

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Care Act and Slough Borough Council, Financial LPAs and Deputyships with Deferred Payment Arrangements

As of 1 April the first part of the new Care Act  comes into effect.

Many things change: for example, CRAG guidance will cease to apply and the Deferred Payments Scheme will change.

Instead of CRAG we will have the Care and Support Statutory Guidance:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/366104/43380_23902777_Care_Act_Book.pdf

The relevant SI under the Care Act 2014 which sits on top of this Statutory Guidance is the Care and Support (Charging and Assessment of Resources) Regulations 2014

http://www.legislation.gov.uk/uksi/2014/2672/contents/made

The Care Act 2014 sits on top of them all:

http://www.legislation.gov.uk/ukpga/2014/23/contents/enacted

From April 1 the discretionary system of deferred payments (with charge on the resident’s house) is being replaced by a mandatory system whereby eligible users will be entitled to the deferment option (but there are qualifying conditions).

Here is the information for the public from Slough:

https://www.slough.gov.uk/health-and-social-care/the-care-act.aspx

https://www.slough.gov.uk/downloads/care-and-support-FAQs.pdf

And the internal report for the benefit of the council.http://www.slough.gov.uk/moderngov/documents/s37092/Report.pdf

Mental Capacity Slough will assure itself that the person requesting the DPA has the requisite mental capacity to enter into such an agreement. Where a person who lacks capacity has either a Finance and Property Attorney or a Deputy, evidence of this will be required before the representative can sign the DPA on the person’s behalf. Where the person who lacks capacity is unrepresented, an application must be made to the Court of Protection: § A family member willing to take up the role may make a Deputyship § In the absence of such a candidate an application may be made for a Panel Deputy to be appointed § Slough may take the view that it will apply for Deputyship, depending on the Council’s resources and the composition and value of the person’s assets

Lots of reading…

Law Society research: millions of Britons have no will – The Law Society

Law Society research: millions of Britons have no will – The Law Society.

 

It is, as we have said for a long time, the exception rather than the rule.  Somewhat horrifying to think that over two thirds of us do not have wills.

I’m dealing with some intestacies at the moment, and practically speaking, although we can deal with things amicably  (hopefully) within a family, the extra work involved, and the trauma for the family of deciding who is going to do what, who is going to be responsible for making difficult decisions, and the fact that no-one is immediately able to do things on behalf of the estate is tragic.  For less than £200, the client could have saved hours of worry, hours of legal time, so much angst and family difficulties, and prevented the delay in administration – if there had been a will, the house could be on the market now – the estate agents will not risk signing a contract with someone who may not be the administrator, or they might not get their money back.

That is just the problem – Lasting Powers of Attorney are needed in lifetime to make life easier and better for the living who are vulnerable.  Wills are your last chance to make things easier for those you leave behind.  And if you are not a single person with no spouse or children, or grandchildren, then there are all those who are depending on you.  And wishing that you had appointed guardians, and made things clear for you.

In the Matter of Buckley [2013]

Attorneys are expected to be aware of the law regarding their role and responsibilities. Ignorance is no excuse.

a highly unsuitable investment and she broke almost every rule in the book in making it”

This is the case of the reptile breeding investments, if ever you needed something to remember it by, and was recently decided in the Court of Protection (Number 12228697) Click here for the full court transcript  It concerns a lady who had made a Lasting Power of Attorney in her later years, appointing her niece C (her only living relative) to be her attorney.  Miss Buckley had moved to a private nursing home, and was, at the time of the case, 81 years old and of fragile mental health.

The Office of the Public Guardian received a complaint about the way C was handling Miss Buckley’s finances, and it started an investigation.  A Court Visitor went to see Miss Buckley.  She made detailed impartial observations about the way Miss Buckley talked about C, and her account of matters that had occurred during her residence at the nursing home was corroborated.  Although communication was difficult, there appeared to be a recognisable element of lucidity and it was apparently that Miss Buckley viewed her relationship with C as being one where C was only after her money, and where she didn’t trust her.

The Office of the Public Guardian applied to the Court for an order that the LPA be suspended, her accounts frozen, full accounts to be made up and for C to be prohibited from encashing any asset owned by Miss Buckley.

The OPG’s investigator summarised the facts as follows:

  • Miss Buckley’s house had been sold for £279,000 in April 2011
  • Between January 2011 and June 2012 C had used £72,000 of Miss Buckley’s money to set up a reptile breeding business
  • C admitted that she had used at least £7650 of Miss Buckley’s capital for her own personal benefit
  • At one stage there had been daily maximum cash withdrawals of £300 a day from Miss Buckley’s Nationwide account.
  • The Nationwide had alerted Social Services in April 2012 and the Police interviewed Miss C in July 2012
  • Miss Buckley may have incurred a loss of about £150,000

The legal issue that has been clarified by this case, to the extent that it was not covered by the earlier case of Re Harcourt (31 July 2012) is the responsibility of an attorney when investing the donor’s funds.

There are two common misconceptions when it comes to investments.  The first is that attorneys acting under an LPA can do whatever they like with the donor’s funds.  And the second is that attorneys can do whatever the donors could – or would – have done personally, if they had the capacity to manage their property and financial affairs.  Managing your own money is one thing.

Managing someone else’s money is an entirely different matter.

The Master went on to declare that whilst an individual can choose to act unwisely, or not at all, stashing their money under the mattress, this was not something that an attorney could do.

Under the Mental Capacity Act 2005 (MCA)  s1(5) an act done, or decision made [by an attorney], must be done or made in [the donor’s]best interests.

Before the MCA came into force, there was a separate investment branch of the Court of Protection who carefully considered the suitability of investments for each patient.  They divided up investments into short term types and long term types, and assessed the type of asset against the investment requirement and suggested a strategy appropriate for that investment.

When considering the suitability of investments, the person’s age and life expectancy are considered to be the most important criteria.  A person of over 80 at the time the court would be asked for investment assessment would be considered to have a life expectancy of less than five years, unless there was clear medical evidence to the contrary.  As such, a short term code would be selected, depending on the amounts at stake.

The Master went on to state that

“generally speaking , attorneys acting under an LPA should ensure that any investment products or services they acquire on a donor’s behalf are provided by individuals or firms who are regulated by the Financial Services Authority.”

This means that part of the value of the investment will be covered under the Financial Services Compensation Scheme.

I would suggest that, as they have fiduciary obligations that are similar to trustees, attorneys should comply with the provisions of the Trustee Act as regards the standard investment criteria and the requirement to obtain and consider proper advice.  I would also recommend that attorneys and their financial advisers have regard to the criteria that were historically approved by the court and the antecedents of the OPG.

The master also reiterated the rule that investments should be made in the name of the donor, not that of the attorney, but that if it was not possible for the asset to be held in the name of the donor, that there must be a declaration of trust over the asset, documenting the true beneficial ownership.  And that any loans of money to a member of the donor’s family should be (unless very small indeed) approved by the court, especially when it is in a case where there might be conflict between the attorney and the donor.

The Court therefore ordered that the LPA be revoked and cancelled, so that a deputy could be appointed.  It was reported that the police had considered her conduct naïve but that no crime had been committed.

This case is one of the most important to come out of the Court of Protection in recent years as it clarifies many of the frequently asked questions and misconceptions.  The Master went on to observe that the court’s authority should be sought in circumstances where it might appear as if the attorney’s own interests might conflict with those of the donor, in particular that:

  • Attorneys should keep the donor’s money and property separate from their own or anyone else’s money
  • Subject to a sensible de minimis exception, an application must be made to the court for an order under section 23 of the MCA 2005 in any of the following cases:
    • Gifts that exceed the limited scope of the authority conferred on attorneys by section 12 MCA 2005
    • Loans to the attorney or to members of the attorney’s family
    • Any investment in the attorney’s own business
    • Sales or purchases at an undervalue; and
    • Any other transactions in which there is a conflict between the interests of the donor and the interests of the attorney

Lasting Powers of Attorney: Live or dormant?

Is it better to register LPAs straight away? It’s up to the individual – but on the whole, the PGO might be right. To err is human, and the best way of getting to the right end result is not to test humanity’s weakness.

If we look at the system from a solutions-based viewpoint, then the best way of getting what the client wants or needs might be to get the document registered sooner rather than later. If there is an error that was missed somewhere along the line, then if the LPA is registered early, there is a chance that the donor still has capacity to execute a replacement document. If left until the very last moment – whilst this can still afford protection from attorneys managing your affairs before you are ready for them to – runs the greater risk of all your plans coming to nothing. With no prospect of recovery other than a deputyship application.

Abuses do exist in the system. As do errors. Because there are human beings involved. The most important thing is to focus on the end result. If a mistake has been made, can it be recovered? If an abuse takes place, can the abuse be stopped and the offending person prosecuted. If you want yes to either of those, then the best answer is to register the LPA as soon as possible. And to choose people who you trust (not people of last resort). This gives the widest margin and cushion against abuse or error.