DEPUTYSHIP & INVESTMENT MANAGEMENT - WHAT YOU NEED TO KNOW

If you have been appointed a deputy over someone else’s affairs, you will no doubt want to learn as much as possible about the responsibilities of the role, especially if you will be required to manage that person’s investments.  This post aims to explain the key expectations of deputyship, when looking at this from the point of view of investment management.

What is a deputy?
A deputy is someone who is appointed by the Court of Protection to look after the affairs of someone else, usually because they cannot do this for themselves.  This can be a close family member or friend, or a professional such as a solicitor or accountant.  There are different types of deputyship, and in this guide we are concerned with the role of someone who takes responsibility for the financial affairs of another, known as a deputy for property and affairs.

When you are appointed as a deputy you will receive a Court Order which will set out what you are allowed to do as that person’s representative.

Your responsibilities as a deputy
Obviously, you should take deputyship seriously as you will have a wide degree of control over another person’s finances.  Therefore, as a deputy you should:

• only make decisions in the person’s best interests
• only make the decisions the court says you can make
• apply a high standard of care when making decisions

If you are looking after someone else’s investments, it is common that the Court of Protection will insist that you seek professional financial advice, at least in the beginning of your deputyship.  Of course, many deputies look to continue this financial advice on investments since they can therefore demonstrate that they have taken into consideration the best interests of their charge. You may also be expected to provide accounts to the Court, so you should be careful to keep detailed records.

As a deputy you are broadly expected to look after the best interests of the person for whom you have accepted responsibility.  This means investing money as that person would have done before their incapacity.  It also means that you cannot hold money on their behalf, and you cannot make gifts out of that person’s money.  Also, you are not permitted to make a will on that person’s behalf, and neither are you allowed to undertake any kind of inheritance tax planning.

You are expected to carry out your responsibilities sensitively and diligently, keeping records at all times.  You should make a reasonable judgement as to whether you should involve the person whose affairs you are managing.  You should be particularly careful when dealing with potential conflicts of interest.  This could be when you might stand to benefit from the decisions made as a deputy.  In these cases you should probably seek legal advice and would probably need a Court Order.

Your liabilities as a deputy
As long as you follow the guidelines provided by the Court or Protection and do not step over the boundaries of the Order, you will be unlikely to incur any legal liability for your decisions.  obviously, you will be held accountable where you step outside of the authority granted to you by the Court of Protection.  if you are appointed to look after the investments of someone as a deputy, you may be required to put some money aside as a security against the money you are managing.  This will be decided by the Court of Protection.

Investment Management for deputies
Obviously, it makes sense to seek professional financial advice when dealing with the investments of someone under deputyship.  This would not only provide you with a strategy for managing the investments, but would also help you in your role as a deputy to keep records and to demonstrate that you have looked at the best interests of your responsibility.

For further information see the Government website on deputyship.