A smiling carer chats with an elderly lady

A day in the life of a professional Property & Affairs Deputy: Investments

Caroline Featherby is a trainee solicitor who assists with applications and administration on behalf of our Court of Protection team. In this series of posts Caroline looks at the processes involved in an on-going deputyship, reflecting on the hurdles faced by the team as well as the life changing decisions they make to support people who are unable to manage their own affairs. 

Where a patient (“P”) has significant capital, received either by way of a compensation award or, for example, through the sale of a property, it is the role of the Deputy to consider whether it is appropriate for investments to be made out of the capital.

The first step is to prepare a cash flow forecast for P, reviewing all incoming and outgoing payments.  The deputy can then calculate how much money will be required for P to continue living comfortably, before releasing a sum of the capital to be invested.

P’s individual requirements will have an effect on the level of risk that can be taken, so the family and in some circumstances, P, will meet more than one Investment Manager and/or Financial Planner to consider a strategy and the investments that are appropriate for P.    Important issues include:

  1. whether the money invested needs to grow and by what margin;
  2. whether the funds will need to be accessed in a year, two years or five years to provide for future expenditure such as care costs; and
  3. whether a level of income needs to be generated to feed back into the deputy account. If this is not required the income can be re-invested and this will in turn create further income.

A formal report is generated setting out the comments, observations and recommendations of those instructed.

Where the monies are held in the Court Funds Office, the Deputy submits the advice and requests that the required funds are paid into the deputy account to be invested accordingly.

In many cases the monies are divided into separate pots:

  1. an investment might be made into the stock market and will be managed on a daily basis, reacting to market fluctuations;
  2. cash is invested in deposit bond accounts with various institutions at a level that doesn’t exceed the Financial Services Compensation Scheme, currently £85,000 per institution.

One of the most significant responsibilities of a Property and Affairs Deputy is to seek relevant and accurate professional advice when required. Investments are complex, particularly in the current uncertain economic climate, so choosing the right strategy at an early stage will have a significant impact on the longevity and potential growth in P’s capital.

Clarke Willmott partners Anthony Fairweather, Martin Pettingell and Elizabeth Smithers are based in our Bristol office and act as Professional Deputies for more than 50 clients. Anthony Fairweather is a panel deputy at the Court of Protection.

…to be continued.