Continuing and welfare attorneys: code of practice

Chapter 4 - Specific guidance on exercising continuing powers of attorney

Managing the person's finances

4.1 You are not obliged to invest the person's estate for maximum profit but you must exercise at least the standard of financial management that he/she would expect.

4.2 You are not obliged to do anything which would otherwise be within your powers if doing it would, in relation to its value or utility, be unduly burdensome or expensive.

4.3 The funds and assets you are managing still belong to the granter and you should usually keep the person's finances separate from your own or anyone else's There may be occasions where the granter and attorneys have agreed in the past to keep their money in a joint bank account. It is possible to continue this. But in most circumstances attorneys must keep finances separate to avoid any possibility of mistakes or confusion.

4.4 If you abuse your position, for example by using the granter's funds for your own benefit, you may be liable to make good his/her losses. It is also possible that anyone investigating your actions may consider such use as theft or fraud and report the matter to the police or, if you are a professional person, to your supervisory body.

4.5 If you live in the same household as the granter, the use of his/her funds for household expenses that benefit you as well as the person will not count as abuse.

4.6 If you act reasonably and in good faith, and in accordance with the principles, you will not be liable for any breach of any duty of care or fiduciary duty.

Review the person's property and financial affairs

4.7 You may yourself be the nearest relative and/or primary carer of the person. You may also be familiar with his/her affairs either because you have day to day contact, or you have already been exercising a power of attorney while the granter retained capacity. It may be that the person's property and financial affairs are very simple and that there are few new decisions to be made.

4.8 The following good practice guidance is written mainly from the point of view of an attorney who has not had any day to day knowledge or experience of the adult's affairs but should also be used as a check by attorneys who believe that they are reasonably familiar. It is good practice for all attorneys to review the adult's property and financial affairs. This might involve:

• checking whether the adult owns his/her own home, whether solely or jointly, whether there is any outstanding loan, and what arrangements are in place to pay such a loan;
• if the person resides in someone else's home, whether he/she has occupancy rights by reason of being a spouse, civil partner or cohabitant;
• if the person is renting, what arrangements are in place to pay the rent and what security of tenure he/she has over the property;
• the size and location of the person's savings and investments;
• checking what regular outgoings the adult has or is likely to have, for example bills for utilities, council tax, hire purchase or catalogue, and what arrangements are in place to pay these;
• checking what income the person is receiving, what are the payment arrangements, and whether the adult is receiving all the benefits and other sources of income to which he or she may be entitled;
• checking what liabilities the adult may have to aliment other members of his/her family.

Find out if anyone else has powers over the person's finances and/or property

4.9 You should be aware that as continuing attorney, you may not be the only person with powers to intervene in the person's affairs.

4.10 You should remind yourself whether there is a joint attorney and if so how the powers are distributed between you.

4.11 You should also check whether there is any other person with powers over the adult's financial affairs, in particular:

• any trustees of a trust set up for the benefit of the adult, or in which the adult has an interest;
• any holder of a joint account with the adult;
• any person authorised by the Public Guardian (under Part 3 of the Act) to access funds;
• any Department for Works and Pensions appointee who has authority to receive benefits on behalf of the adult;
• anyone who has been managing the adult's affairs under arrangements involving no official appointment. (It is likely that your powers will supersede those of any such person, but you should only intervene if that is justified under the Act's principles.

4.12 If your powers include powers to run the person's business, you will need to ensure that you identify any partner or co-director in the business, and obtain copies of all partnership agreements and other relevant documents, and take advice on how the granter's business should be run and administered.

Find out if anyone has welfare powers in relation to the person

4.13 You should check if there is anyone who has welfare powers in relation to the person, such as a welfare attorney or someone authorised under an intervention order. You and they should consult with each other, and you may be required to deal with the financial consequences of decisions by a person exercising such powers.

Paying for community care services

4.14 You should also find out if the person has been in receipt of community care services and if there is a charge for these services. Although some services are free, there may be a charge for others. You will need to identify the social work officer within the local authority who has been responsible for arranging services.

4.15 It will be a matter for any attorney with welfare powers in relation to a granter to ensure that he/she is receiving appropriate services. A welfare attorney with powers to make care arrangements is entitled to apply for Self-directed support ^[4] on behalf of the person, if he or she wishes to do so. Regular payments are then made into a separate account in the name of the welfare attorney.

Assessing the need for change

4.16 It would be good practice to make your own assessment of whether the adult's property and financial affairs are in a satisfactory shape. For example:

• are funds being fully utilised for the person's benefit;
• are current standing orders adequate to pay for any regular and ongoing expenses;
• are any surplus funds invested so as to secure a reasonable return bearing in mind the size of the funds;
• are there benefits or other income to which the person may be entitled and which are not being claimed?

Taking stock of the need and timescale for future changes

4.17 You should find out when it will become necessary to make decisions about various matters, such as the:

• renewal of a lease;
• repayment of any outstanding loan;
• reinvestment of any funds that reach maturity, such as a life assurance policy;
• future support of any dependant of the person, for example, spouse, children;
• any possible move to residential care.

Obtaining specialist advice

4.18 Consider whether you need specialist advice on decisions to be made now or in the near future. Examples:

• With regard to the investment of funds you may wish to obtain independent financial advice.
• If the adult's financial affairs are complex, or you have to fill in financial forms such as a tax return, you may need the advice of an accountant.
• If the question of the sale or purchase of a house or other heritable property arises, you will certainly need legal advice.
• You will also be well advised to seek legal advice if it appears to you that the adult may have a claim against a third party for damages such as for personal injury.
• If you are empowered to run a business belonging to the adult, you may well need legal and accountancy advice.
• If you require an accountant or a financial adviser and do not already have one you should contact the Institute of Chartered Accountants of Scotland ( ICAS) or the Financial Services Authority ( FSA).
• If you require a solicitor and do not have ready access to one, you should contact the Law Society of Scotland. Always consider whether the adult may be entitled to legal aid. SLAB has a list of solicitors in your area registered for legal aid.

Updating your file

4.19 When you have carried out the initial review of the adult's financial affairs, it would be good practice to update your file to record the following information:

• sources of income and the weekly or monthly amounts;
• outgoings and how these are met;
• accounts with financial institutions, including account name and number, and address of financial institution, and if possible the amount in each account, and where and by what means any income is paid;
• any loans for which the adult is liable and arrangements for paying these;
• any insurance or life assurance policies held by the adult;
• any bonds, shares or other investments held by the adult, and wherever possible the actual bonds or share certificates;
• any regular payments which the adult is liable to make in relation to dependants, such as aliment to separated spouse; or children whom the adult is liable to maintain; or school fees;
• any other people with power to intervene in the adult's financial affairs;
• name, address and other contact details of any person with welfare powers in relation to the adult and any officer of the social work department providing community care services to the adult;
• names, addresses and other contact details of any professional advisers with whom you will be dealing over the adult's financial affairs, such as financial adviser, accountant or practising solicitor.

If you think that action needs to be taken

4.20 If the outcome of the review is that certain actions may need to be taken you must apply the principles.

Check your powers

4.21 If you decide that an intervention is needed, you should check whether your powers would cover that particular type of intervention.

• Examples: You may think that the adult's savings would be better invested in bonds. But you may not have been granted power to reinvest the adult's savings.
• You may think that the adult is entitled to an allowance such as an attendance allowance, but you may not have been granted power to claim benefits on behalf of the adult. However, in this situation you can apply to the Department for Work and Pensions to become the person's appointee.

4.22 You may consider that for tax planning reasons an entitlement should be renounced or a gift made, but you can only do these things if specifically authorised to do so in the power of attorney document.

4.23 You will only be able to intervene as attorney where you have been granted the powers to do so. It is not possible to add powers once the adult has lost capacity. Where financial powers are needed to enable you to act, you, or someone else, may apply to become a withdrawer or financial guardian or intervener, as appropriate. Where you feel an important welfare decision/s needs to be made, and there is no one else with appropriate powers, you may wish to bring the situation to the attention of the social work department, and/or consider applying for a welfare guardianship or intervention order. For further details see Guardianship and Intervention Orders – making an application. A Guide for Carers ( Annex 2).

Setting out your proposals for change

4.24 Once your review is complete you should check your powers. This re‑reading of the document may also highlight issues that you may have overlooked in your review of the adult's affairs. For example the power of attorney may cover tax planning, but you may have overlooked this. When you are satisfied that your review is complete it would be good practice to finalise your proposals in a written document which you should give to the adult and send to others with an interest in his or her property or financial affairs. You should place a copy of this document on your file.

4.25 Having sent out your proposals, you should meet the person to explain what you feel is the best plan of action and seek his/her views as far as possible. The adult may be capable of instructing you on the matter in question, although not capable of carrying out the action for him or herself. The adult may also be able to indicate a view by non-verbal language or signals.

4.26 Then ideally meet with the nearest relative or anyone nominated by the sheriff to act in place of the nearest relative and primary carer, named person, any welfare attorney, and any other person with an interest in the property or financial affairs of the adult, at which you can explain your findings and recommendations and seek their views. If a meeting is not possible you should write explaining your proposals to each of these, and invite written comments.

4.27 If you have taken professional advice, you may also wish to involve your professional adviser or advisers in the meeting; or copy your proposals to the professional adviser or advisers and invite their comments.

4.28 You should also take account of the persons past wishes and feelings pertinent to the matter in hand. For example, before disposing of an asset, you may require to check whether it has been specifically bequeathed to someone in the adult's will.

4.29 If the adult has communication difficulties, the guidance in Annex 1 should be followed.

4.30 You should also find out the views of the nearest relative or anyone nominated by the sheriff to act in place of the nearest relative, named person and primary carer. If the nearest relative is unable to attend meetings, for example, because he or she lives far away, or does not respond to letters, then you may not be able to ascertain the nearest relative's views. Similarly, if the primary carer or named person is unable or unwilling to give views, then you may not be able to ascertain the primary carer's views, but all reasonable efforts to do so must be made.

4.31 You are obliged to find out the views of any welfare attorney, and anyone else appearing to have an interest in the welfare of the adult, in so far as it is reasonable and practicable to do so. Such a person is likely to have made his or her interest known to you and to be willing to express views.

4.32 You should, in so far as it is reasonable and practicable to do so, encourage the adult to exercise whatever skills he or she has concerning his property and financial affairs, and to develop new such skills.

Recording action taken

4.33 Having followed this process it should be possible to reach conclusions on the actions needed in relation to the person's property and financial affairs, which are based on proper investigation, and which comply with the principles. You should record these conclusions on your file. For example, you should file:

• photocopies or electronic copies of any correspondence relating to the adult's property or financial affairs;
• a copy of any instructions that you give to a financial institution, utility company or other body in relation to payments by the adult or to the adult;
• invoices and receipts for purchases of £100 and over incurred on behalf of the adult;
• receipts for any sales made of the adult's property;
• any correspondence with HM Revenue and Customs on behalf of the adult;
• any correspondence with the adult's employer or pension provider;
• any correspondence concerning insurance or life assurance policies relating to the adult or the adult's property;
• documents relating to any loan incurred by the adult; or any insurance policy.

4.34 You must keep the adult's financial affairs strictly separate from your own and be ready to account for how you have spent funds belonging to the adult and what you have done with any payments due to the adult and made to you.

4.35 You should keep all receipts for purchases of £100 or more, on behalf of the person and any guarantees or insurance policies in respect of purchases so that you can exercise the person's rights as purchaser to have property repaired or replaced.

Ongoing functions as a continuing attorney

Monitor the adult's property and financial affairs

4.36 It is your responsibility, within the scope of your powers, to monitor the adult's property and financial affairs.

• Example: if it is within the scope of your powers to rent out property owned by the person, it is your responsibility to make sure that rents are collected regularly and paid to the adult and that any landlord responsibilities are carried out.

4.37 You should also check that the adult's finances remain under control, by monitoring statements of account, and ensuring that deficits are not incurred. You should take the necessary steps to avoid the adult incurring unnecessary debt.

Assessing the need for further action

4.38 Either as a result of the review and your own monitoring, or because you are approached by someone else with an interest, you may decide that one or more further interventions in the person's affairs are needed.

4.39 The process for carrying out further decisions or actions is similar to that you carried out initially. Briefly, for each proposed action, you must observe the principles, check that your powers as continuing attorney will permit you to take the action or decision in question, and record what you have done.

Seeking the advice of the public guardian

4.40 The Public Guardian has a duty to provide continuing attorneys with information and advice about the performance of their functions, when requested to do so. It is a good idea to contact the Public Guardian if in doubt about the scope of your powers, or about the course of action you propose to take.

What to do where there are conflicting views on a proposed action or decision

4.41 When you hold reviews with the adult, the nearest relative and relevant others regarding the exercise of your powers, you should try to ensure that you provide as much information in advance as possible. Do not take action that will come as a surprise to the others and make sure that you have taken proper account of their views.

4.42 Despite your best efforts, however, there may occasionally be disagreements which cannot be readily resolved.

• Example: there may be a dispute as to how the granter's funds should be managed, with relatives who stand to inherit from the adult being concerned to maximise the profitability of investments; while you may believe that more money should be spent on meeting the person's present needs.

4.42 In seeking to persuade others of your point of view, you should direct those who disagree with you to your statutory responsibilities as attorney, to the powers that the granter chose to confer, and to the fact that the granter selected you to exercise those powers for him or her. It will assist you if you can show that you have:

• applied the principles systematically;
• balanced one principle against another in the correct manner. For example you need to consider benefit to the adult as well as least restrictive action or decision. If someone who disagrees with you takes this principle as a starting point, he or she may be attaching insufficient weight to the need to benefit the adult;
• taken account of the past and present wishes and feelings of the person so far as these can be ascertained;
• taken account of the views of the nearest relative or anyone nominated by the sheriff to act in place of the nearest relative and primary carer, named person, and anyone else appearing to you to have an interest in the welfare of the granter or in the proposed intervention. But you do not need to accord undue weight to any one view. Nor do you need to follow the majority view where you have carried out your own assessment of the need for action, and it does not agree with the majority.

4.44 If you are unable to persuade others to accept your judgement, you may wish to seek additional advice, for example from the Public Guardian, from a practising solicitor, an accountant or an independent financial adviser. If you can produce written advice that supports your decision, this may help in defending your actions.

4.45 Ultimately you may find that you simply have to insist. If you are confident in your judgement, do not back down. You would be letting the person down if you gave in for the sake of peace; or stood down, leaving the granter with no-one (or someone other than you, whom he/she did not choose) to take care of his/her affairs.

4.46 If you still encounter difficulty you can advise those who disagree with you of their right to complain to the Public Guardian. You can also direct those who disagree with you to section 3(3) of the Act which allows them to apply to the sheriff for directions. Alternatively you can exercise your own right to apply for directions under section 3(3).

Conflict of interest affecting you as attorney

4.47 As continuing attorney, you may be someone close to the granter in another capacity such as relative, or carer. You may find that this occasionally creates a conflict of interest between your own personal interests and your fiduciary duty. Do not let this worry you unduly. The very person who is best to be attorney is likely to be someone close to the granter and this situation will not be uncommon.

• Example: if you are living in the same household as the granter you may be in some doubt as to how far you are entitled to spend the adult's resources on general household expenses. If you or your children are destined to inherit money from the adult, you may feel reluctant to spend the adult's estate in a lavish manner on his or her welfare when this will diminish the residual estate.

4.48 In these as in all other circumstances you should observe the principles. Ask the person's opinion and consult anyone else with an interest in his/her property or financial affairs and welfare. If the person cannot express an informed opinion, consider what he/she would have done had he/she remained capable.

4.49 If you are in doubt about the proper course, or find that you are being challenged, there are various options open to you. You could:

• Ask an independent practising solicitor or someone from an independent advocacy project to represent the interests of the adult in discussing the matter with you. The expense of this can be met from the granter's resources (or the adult may be eligible for legal aid).
• Consult the Public Guardian.
• Seek directions from the sheriff under section 3(3) of the Act.

What to do where your powers are insufficient

4.50 You may find that your powers are insufficient to carry out a particular intervention which is necessary.

• Example: the time may come to sell the person's house so that he/she can move into residential care, but the person may not have granted you powers to deal in heritable property. You may find that the person has a legal entitlement, but your powers do not allow you to claim it (or alternatively to renounce it) on his/her behalf. You may find that the granter's estate has grown larger than anticipated, and tax planning measures, not included in the power of attorney, become necessary.

4.51 In these circumstances you may need to consider using one of the other interventions under the Act.

• You could, for example, apply to the sheriff for an intervention order to empower you to take the necessary steps. A separate code of practice is available dealing with intervention orders and guardianship.
• If you find that your continuing power of attorney is inadequate in a number of ways, for example because of drafting flaws in the original document, or a step-change in the adult's means (say, a large inheritance or settlement of damages) you may need to apply to the sheriff for financial guardianship to make good the deficiencies.

4.52 Before taking such a step you will need to apply the principles to ensure that guardianship is indeed justified and necessary.

What if there is a complaint against you

4.53 If someone has a complaint against you, and either does not put it to you or is not satisfied with your response, he/she has recourse to the Public Guardian. The Public Guardian has a duty to receive and investigate, while the adult is alive, all complaints regarding the exercise of functions relating to the property or financial affairs of an adult made in relation to continuing attorneys.

4.54 The Public Guardian will contact you about any complaint received and ask you for your version of the facts. If you have applied the principles correctly, have taken advice, have kept relevant documents such as bank statements and receipts, and have recorded your decisions and actions on a file as recommended above, you should have nothing to fear from such an investigation.

4.55 The Public Guardian also has powers to obtain records when carrying out investigation inquiries into complaints made. The Public Guardian has the power to require continuing attorneys to provide records and other relevant information that may reasonably be required. The Public Guardian can also require banks and other financial institutions to provide records and other relevant information about the accounts of the adult concerned.

Possible court proceedings in the event of a complaint

4.56 A person who is dissatisfied with your actions as continuing attorney also has recourse to the sheriff. An application to the sheriff may be made by any person claiming an interest in the property, financial affairs or personal welfare of the granter. You can also apply for directions under section 3(3).

4.57 The sheriff may dismiss such an application from a person challenging your actions, or may give the applicant or yourself directions. Everything will depend on the case which is put to the sheriff and his/her view of what is required by the principles in the situation which has been set out. You may wish to seek legal advice. The cost of such legal advice will normally be payable out of the granter's estate.

4.58 Where the sheriff, on such an application, is satisfied that the granter is incapable in relation to decisions or actions to safeguard or promote his/her own interests, in so far as these relate to the power of attorney, the sheriff may make an order ordaining you to be subject to the supervision of the Public Guardian.

4.59 This will mean that you carry on as continuing attorney, but you will have to account for your decisions and actions to the Public Guardian, whereas previously you did not have to account formally to anyone.

4.60 The sheriff can also ordain that you submit accounts in respect of any period specified in the order for audit to the Public Guardian.

4.61 The sheriff's decision on an order made for your supervision, or for you to submit accounts, is final.

4.62 The Public Guardian has a duty to add the details of any order made by the sheriff to the register, and to notify the granter as well as you of its terms.

4.63 If you find yourself in this situation, this does not mean an end to your functions as continuing attorney. If you have kept records as recommended above you should have little difficulty in producing the necessary accounts, although you may need to hand your files to a professional accountant or practising solicitor to prepare accounts in the proper form for submission to the Public Guardian.

4.64 If you are ordered to be under the supervision of the Public Guardian you should regard it as a help rather than a threat. As a first step you should have a meeting with the Public Guardian, show her your file, ask her what she wants you to record in your file from now on, and agree a deadline for the submission of the account of your activities to date. In the event that it appears necessary to the Public Guardian to safeguard the property or financial affairs of the granter, she has the power to take part in or initiate court proceedings.

4.65 In extreme cases the sheriff can revoke your powers or some of them.

Supervision by the public guardian

4.66 The Act requires the Public Guardian to supervise continuing attorneys where ordered to do so by the Sheriff.

4.67 Supervision is intended to the ensure that attorneys are carrying out their functions properly and, depending upon the content of the court order, may relate to some or all of your actions with the adult's estate.

4.68 Upon the court issuing an order for your supervision a copy will be sent to you and to the granter and may also be sent to the local authority.

4.69 It is likely that the court will require you to lodge an accounting of your transactions with the granter's estate. The initial account will require to cover a specified period. Accordingly, the account should commence by showing a description of the estate under your control at the commencement of the accounting period, detail income received and expenditure incurred, and conclude showing the balance under your control at the end of the account period. The Public Guardian may in due course call for sight of bank books, invoices or other material to support the entries in your account.

4.70 The Public Guardian will inform you of the date by which you require to lodge the initial account of your financial management. Failure to lodge the account by the due date may result in the matter being reported to court and your possible removal. Any subsequent accounts required will be due on the anniversary of the first account lodged.

4.71 Should the Public Guardian not be satisfied with the account or records produced she will try to resolve the matter with you but, if unable to do so, may report her concerns to the court and seek to have you removed from the office of attorney.

4.72 Your account will be available for inspection by anyone with an interest in the adult's estate.

4.73 While under the Public Guardian's supervision you will require to obtain her approval for any gifts you propose to make from the adult's estate or for the sale or purchase of any accommodation used or to be used as a dwelling house by the adult. The Public Guardian will not require you to seek permission for small gifts (with a value of £100 or less) for traditional celebrations such as birthdays, anniversaries, or weddings. The Public Guardian may also require you to obtain advice in relation to the investments retained by you on behalf of the adult.

4.74 If the Public Guardian considers it necessary she may consult with the MWC and the local authority if there appears to be a common interest.