Managing someone else's financial affairs
If you care for a family member or friend, you may have to manage their financial affairs if they are unable to do so themselves. There are various levels of management depending on the individuals capacity and needs.
If you are unable to look after your finances yourself, are a current client of Adult Social Care and have no friends or family to help, then your Care Manager can ask for the Financial Protection Team to help you.
The main purpose of the Financial Protection Team is to assist clients who are unable to manage their own financial affairs and have no-one that will take on this role for them. The clients may lack capacity or be subject to financial abuse.
This assistance can vary depending on the individual client and can range from payment of residential fees and ensuring they receive their personal allowance, to investing and securing funds, arranging the sale of property and investing capital to ensure the best return for the client.
The Financial Protection Team can act on behalf of a client under Appointeeship or Deputyship.
If you have mental capacity and can manage your own affairs, but are not always able to collect your benefit, you can ask someone to act as a third party on either a temporary or permanent basis. This person can collect your money from your bank account, Post Office account or cash your cheque for you, but have to have your permission to do so.
A third party may be a family member or trusted friend. To arrange an individual third party you will need to contact the Department for Work and Pensions [external website]
If you are incapable of managing your own financial affairs because of your mental capacity, the Department of Work and Pensions can appoint someone else to receive your benefits and use the money to pay your household expenses to help you budget your finances to pay bills, food costs and personal items of expenditure. An appointee can be an individual, a family member or friend or an organisation, for example, a local authority (such as Darlington Borough Council) or a firm of solicitors.
An appointee would be responsible for everything to do with your benefits such as completing and signing all forms, and reporting changes of circumstances. An appointee cannot be responsible for your private bank account(s) or private pension.
Appointeeship can help you to remain independent and take a weight off your mind knowing that someone else has current responsibility for receiving your benefits and paying bills and helping you to budget your money.
For more information see the Appointeeship leaflet (Rich text document) or visit the Department for Work and Pensions website [external link]
If you are incapable of managing your own financial affairs because of your mental capacity and you have income or capital other than benefits (for example, occupational pension or other income, capital in your own bank or property), then the Court of Protection can appoint a Deputy (Property and Affairs) to handle the day to day running of your personal finances and property.
The Court of Protection will decide what powers the Deputy will have. For example, it may allow the Deputy to access your personal bank accounts if this is needed to pay for any bills you might have, perhaps Residential Home Fees or Mortgage Payments. It may also cover the sale of any property in order to meet your best interests.
Clients may have made arrangements for Power of Attorney prior to becoming incapacitated. Therefore these arrangements will continue and Deputyship will not be applicable.
1. Ordinary Power of Attorney
This gives one or more people the legal authority to handle your financial affairs. It is only valid while you still have the mental capacity to make your own decisions and is therefore the most appropriate course of action in the following circumstances:
If you want someone to act for you on a temporary basis (for example: if you intend to go abroad for a long period of time or if you want someone to act for you, but are still able to supervise their actions).
A Power of Attorney provides the person you have appointed to act on your behalf with a legal document to prove their designated powers. You can buy an Ordinary Power of Attorney document from a law stationer or arrange for a solicitor to prepare one. Ordinary Power of Attorney does not need to be registered with the Court of Protection.
2. Lasting Power of Attorney
This is a new power introduced by the Mental Capacity Act and replaces Enduring Power of Attorney.
It is a legal document which appoints one or more people to act on a person's behalf, if they become incapable of making their own decisions sometime in the future. A Lasting Power of Attorney must be created while the person is still capable of understanding the nature and effect of the Lasting Power of Attorney.
There are two types of Lasting Power of Attorney:
- A Property and Affairs Lasting Power of Attorney - which gives the attorney authority to make decisions about your financial affairs.
- A Personal Welfare Lasting Power of Attorney - which gives the attorney authority to make decisions about your health care and personal welfare.
For more information on arranging Power of Attorney visit the Office of the Public Guardian website [external link]