CHAPTER 5 EXERCISING FINANCIAL GUARDIANSHIP
This chapter sets out guidance for single and joint guardians on:
- the duties on financial guardians
- how to proceed
- consulting the adult and others
- preparing an inventory of the adult's estate
- preparing a management plan
- keeping records
- the ongoing functions of a financial guardian
- what to do if there is a conflict of interests
- what happens if there is a complaint against you.
DUTIES ON FINANCIAL GUARDIANS
5.1 This section sets out the statutory duties which you, as a financial guardian, are expected to carry out in exercising your powers. If challenged you should have no problem justifying your actions if you are able to demonstrate that you have acted in good faith.
- Duty of care
A guardian or other person acting under the Act is held at common law to owe a duty of care to an adult whose affairs he or she is managing. You must act with due skill and care in exercising the powers you have been given in relation to the adult. Where a guardian has financial powers and he or she abuses his or her position, it is possible that his or her actions may be considered as theft or fraud and the matter will be reported to the police or, if a professional person, to their supervisory body (or both as appropriate). A professional person acting under a guardianship order must demonstrate the skill and care that would be expected of a reasonably competent member of that profession.
- Fiduciary duty (position of trust)
A guardian has what is known as a 'fiduciary duty' to the adult. This means that you are placed in a position of trust with respect to the matters covered by your powers. The court has placed trust in you to exercise the powers properly.
- Duty to apply the principles - for details see paragraphs 4.45-50.
- Duty to keep accounts and records - for details see paragraph 5.64.
- Duty of confidentiality - for details see 3.1.
- Duty to inform the Office of the Public Guardian (Scotland) of any change in circumstances - for details of requirements see paragraph 5.70.
GENERAL REQUIREMENTS OF FINANCIAL GUARDIANS
5.2 As a financial guardian you will not have a purely reactive role. Financial guardianship is not just a matter of waiting until someone else comes to you with a problem about the adult's property or financial affairs.
The Act requires you to take charge of these affairs in an active way and very detailed requirements for doing this are set out in Schedule 2 of the Act as well as in the body of the Act. Schedule 2 is reproduced in full at the end of this part.
5.3 The sheriff and the Public Guardian both have discretion to waive certain requirements of the Act and are likely to do so if the adult's affairs are simple and the estate modest. This will be done where necessary to avoid undue expense falling on the estate and unduly burdensome requirements falling on you as guardian. In applying for financial guardianship you may yourself have asked the sheriff to direct that the requirement for a management plan be waived.
5.4 If you are unsure of what to do in specific circumstances you can contact the OPG for advice.
5.5 If you abuse your position, for example by using the adult's funds for your own benefit rather than that of the adult, you will be liable to make good the adult's 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 (or both as appropriate).
5.6 If you live in the same household as the adult, the use of the adult's funds for an appropriate share of the household expenses that benefit you as well as the adult will not count as abuse.
5.7 If you act reasonably and in good faith, and in accordance with the management and accounting requirements of the Act and the Public Guardian, and the principles, you will not be liable for any breach of any duty of care or fiduciary duty.
MAKE A PLAN TO IMPLEMENT THE ORDER
5.8 As soon as possible after receiving your certificate of appointment from the Public Guardian, you should arrange to meet with the adult, his or her nearest relative, carer and anyone else with an interest to discuss what should happen next. The adult must be involved in this meeting unless there is good reason for that not to happen. This initial meeting should take place before you prepare any management plan or inventory of the estate under your control.
5.9 As financial guardian, your first responsibility under Schedule 2 paragraph 3 will be to prepare an inventory of the adult's estate. The inventory is an essential first stage before you can prepare a management plan (see below). The Public Guardian has powers to dispense with an inventory or can require you to take other action instead of preparing an inventory.
5.10 The point of the inventory is so that you, and the Public Guardian, know exactly what financial and property interests the adult has that you will be responsible for managing. The inventory is only of those matters which fall within the scope of your authority as guardian, so you will need to check your powers very carefully before preparing the inventory. If in doubt you can consult the Public Guardian as to whether an item should or should not be included.
5.11 An inventory is basically a list of what the adult owns and may cover:
- buildings, land and other heritable property;
- cash, bank accounts, building society accounts, ISAs, money held in the post office or a credit union, etc.;
- moveable property such as furniture, ornaments, jewellery, household equipment, electronics;
- stocks and shares;
- business assets and interests;
- debts owed to the adult;
- life assurance policies where there is a cash return expected;
- compensation payable to the adult now or at some stage in the future under a structured settlement;
- the adult's income, e.g. from benefits, annuities or rents.
5.12 As guardian, provided it is within the scope of your authority, you have a right to obtain confidential financial information about the adult's property and financial affairs. For example, producing your certificate of appointment, you can require from a bank or other financial institution, statements of the adult's accounts or deposits.
5.13 In the course of compiling an inventory you may need to do some research by asking relatives, a solicitor, an accountant or a bank manager for information about the adult's affairs.
5.14 For all valuable items that it appears the adult owns, you should check that there is some proof of ownership, for example in the case of heritable property, title deeds or a land certificate; in the case of a vehicle, the registration document.
5.15 The Public Guardian will prescribe the form and the information to be contained in the inventory and will issue a form to you along with your certificate of appointment.
5.16 You should submit the inventory as soon as possible but in any event within 3 months from the date of registration of your appointment, unless the Public Guardian allows a longer period.
5.17 As financial guardian, you must submit a management plan, in draft, to the Public Guardian unless the sheriff directs otherwise, along with the inventory. You have to take account of any directions given by the sheriff when he or she appointed you with powers over the management, investment and realisation of the adult's estate. A financial guardian's powers are restricted before approval of the management plan, unless the sheriff directs otherwise, to ingathering and taking control of assets and providing necessary payments for the adult's day to day needs. It is good practice for financial guardians to have an informal plan, if the sheriff has waived the need for a formal management plan.
5.18 The Public Guardian will issue a form and guidance to you on how to prepare a management plan. The management plan is designed to satisfy the Public Guardian that you will be taking a proactive role in managing the adult's property and financial affairs. The primary purpose of your appointment is to benefit the adult, not to conserve the estate.
5.19 Section 64(5) of the Act states that the guardian shall, subject to
(a) such restrictions as may be imposed by the court;
(b) any management plan prepared under paragraph 1 of schedule 2; 6 or
(c) paragraph 6 of that schedule,
be entitled to use the capital and income of the adult's estate for the purpose of purchasing assets, services or accommodation so as to enhance the adult's quality of life.
5.20 It will, however, be necessary to exercise prudent financial management to ensure that the assets within the estate are used so as to benefit the adult for the whole foreseeable period of his or her incapacity. Benefit to the adult must be seen as relating to his or her likely means both now and in the future. It would not be sensible to use funds to procure large benefits now, at the risk of leaving the adult inadequately provided for at a later stage in life. In determining this, full account must of course be taken of the adult's realistic expectations of other income by way of pensions, state benefits, etc.
5.21 While you must take account of the adult's wishes in exercising your management function, you cannot be ruled by them. For example, if the adult was inclined to spend imprudently, perhaps on leisure or fashion, or on presents to please family and friends, that does not mean you have to do the same. The adult's wishes must be taken into account and some steps should if at all possible be taken towards meeting them, but benefit is the primary consideration.
REVIEW THE ADULT'S PROPERTY AND FINANCIAL AFFAIRS
5.22 The following good practice guidance is written mainly from the point of view of a guardian 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 guardians who believe that they are reasonably familiar. It is good practice for all guardians to review the adult's property and financial affairs. This might involve:
- checking whether the adult owns his or 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 adult resides in someone else's home, whether he or she has occupancy rights by reason of being a spouse or cohabitant;
- if the adult is renting, what arrangements are in place to pay the rent and what security of tenure the adult has over the property;
- the size and location of the adult'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 adult 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 give financial support to other members of his or her family.
Find out if anyone else has powers over the adult's financial affairs
5.23 You should be aware that, as guardian, you may not be the only person with powers to intervene in the adult's affairs.
5.24 You should remind yourself whether there is a joint guardian and if so how the powers are distributed between you. You should always consult your joint guardian or guardians before exercising your functions unless you have already agreed that consultation is unnecessary or consultation is impracticable in the circumstances.
5.25 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 Department for Work and Pensions appointee who will have authority to claim and receive benefits on behalf of the adult and who will also have authority to act generally on his or her behalf in respect of social security matters;
- Anyone who has been managing the adult's affairs under arrangements involving no official appointment.
5.26 It is likely that your powers will supersede those of any such person, but you will need to check the scope of your guardianship order to make sure that you do not interfere in arrangements which are outwith your powers, or that you seek additional powers to deal with these matters.
5.27 If your powers include making necessary decisions in relation to an adult's business, you will need to consider how the adult's business should be run and administered, taking advice as necessary. 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.
Note who has welfare powers in relation to the adult
5.28 You should note whether there is anyone who has welfare powers in relation to the adult, such as a welfare attorney or guardian or someone authorised under an intervention order. You and they should consult with each other (and you must consult any joint guardian unless you have agreed in advance not to do so). This consultation is important because you may be required to deal with the financial consequences of decisions by a person exercising welfare powers. There will also be financial decisions which will impact on the adult's welfare.
Community care services
5.29 You should also ascertain whether the adult is in receipt of community care services and how these are paid for. You should ascertain who the contact is within the local authority social work department regarding the adult's community care.
5.30 It will be a matter for any person with welfare powers in relation to the adult to ensure that the adult is receiving appropriate services. However it may fall to you as financial guardian to arrange to continue, vary or start payments for these services.
Deciding what to put in the management plan
5.31 You will need to make your own assessment of whether the adult's property and financial affairs are in a satisfactory shape. For example:
- Are current standing orders adequate to pay for any regular and ongoing expenses?
- Are funds being fully used for the adult's benefit?
- 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 adult may be entitled and which are not being claimed?
Taking stock of the need and timescale for future changes
5.32 You should ascertain when it will become necessary to meet the adult, nearest relative, carer named person and any others with an interest to make decisions about various matters, such as:
- the renewal of any lease;
- the repayment of any outstanding loan;
- the reinvestment of any funds that reach maturity, such as a life assurance policy;
- the future support of any persons for whom the adult had accepted some responsibility;
- any possible move to residential care.
OBTAINING SPECIALIST ADVICE
5.33 Schedule 2, paragraph 5, requires you to take proper financial advice about the adult's investments or business affairs.
5.34 You should consider whether decisions require to be made now or in the near future on which you require specialist advice.
5.35 For example, if the adult has significant surplus funds, or will have in the near future, you will require independent financial advice as to how they can best be applied for the adult's benefit, for the balance of income against capital and present against future value. The Public Guardian will expect you to take independent advice if the adult's moveable estate exceeds a prescribed limit. You will need to consult the PG on the prescribed limit, which may be subject to review.
5.36 You may also want to obtain specialist advice of another kind, for example from an occupational therapist about acquiring specialist aids, equipment or services.
5.37 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.
5.38 If the question of the sale or purchase of a house or other heritable property arises, you will certainly need legal advice.
5.39 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.
5.40 If you are empowered to take decisions about a business belonging to the adult, you will need legal and accountancy advice.
5.41 If you require an accountant or a financial adviser and do not already have one you should look in the local yellow pages.
5.42 If you require a solicitor and do not have ready access to one, you should contact the Law Society of Scotland (see Annex 3 for details).
Updating your file
5.43 When you have carried out the initial review of the adult's financial affairs (see above), it would be good practice to update your file to record the following information. This may of course form part of the inventory and management plan, but you may not be required to produce an inventory or management plan. The sheriff may have dispensed with the requirement for a management plan and, in cases where the estate is small or the guardian has limited powers, the Public Guardian may dispense with the need for an inventory or allow for an alternative. In most cases however, an inventory will be required. You may find it helpful to note down the information and use this as a basis for preparing the necessary documents for submission to the Public Guardian. For example:
- list of the adult's sources of income and the weekly or monthly amounts;
- list of the adult's outgoings and how these are met;
- list of the adult's 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;
- note of any loans for which the adult is liable and arrangements for paying these;
- note of any insurance or life assurance policies held by the adult;
- note of any bonds, shares or other investments held by the adult, and wherever possible the actual bonds or share certificates;
- note of any regular payments which the adult is liable to make in relation to dependants, such as aliment to separated spouse; or support for children whom the adult is liable to maintain; or school fees;
- list of any other people with power to intervene in the adult's financial affairs;
- note of 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 solicitor;
- names and addresses and other contact details of any persons with whom you are working jointly.
PROPOSALS IN THE MANAGEMENT PLAN
5.44 The review described above should lead you to reach conclusions about what you should do with the adult's property and financial affairs and, where appropriate, to be able to formulate your proposals in the management plan. It may be that little change will be needed, but if the step has been taken of appointing you financial guardian, then that is unlikely. Your appointment probably reflects the fact that all was not going well and some major changes do need to be made.
5.45 In justifying your proposals you must apply the principles.
5.46 Firstly, you must consider whether the proposals would benefit the adult, and such benefit cannot reasonably be achieved without the decision or action of the type proposed.
For example, if a substantial amount of the adult's surplus funds is in a current account, it will benefit the adult in terms of maximising income to place the funds in an interest bearing account and it will not be possible to maximise income without making some change.
5.47 Secondly, you must consider whether the proposals are the least restrictive option in relation to the freedom of the adult, consistent with the purpose of the proposals.
Continuing the example of the account, you will wish to consider how much freedom the adult should retain to divert the funds to alternative use. If the purpose of the intervention is to maximise income, but the adult may also need access to the capital, you should not recommend tying up the funds in an account where there will be no early access or a substantial penalty for such access.
5.48 You also need to take into account the past wishes and feelings of the adult. You may also have known the adult when he or she was capable, or more capable, and have been able to ascertain his or her wishes or feelings at that time. Or you may be able to consult others. This principle does not mean you have to do exactly what the adult would have wanted. It may be that the adult was inclined to spend too much for the benefit of others or on things that were harmful to him or herself. But the adult may also have had reasoned views which should be respected.
For example, there is no point in considering that the adult invest in stocks and shares if the adult has already made it clear that he or she prefers safe investments with a lower return to more risky investments. You should also respect the adult's wishes and feelings regarding ethical investments.
5.49 In relation to every particular intervention that you are recommending you will also need to take account of the present wishes and feelings of the adult so far as they can be ascertained. In order to do this you will need to follow the guidance in Annex 1. Again, you do not have to do exactly what the adult wants, but some steps should be taken to meet his or her preferences,
For example, by agreeing that the adult should have a modest amount of pocket money to spend each week as he or she pleases, or should personally manage some aspect of his or her affairs such as taking bills in to be paid.
5.50 You also need to take account of the views of:
- the adult's nearest relative (or anyone nominated by the sheriff to act in place of the nearest relative);
- the adult's primary carer;
- the adult's named person, in so far as it is reasonable and practicable to do so; and
- anyone else with an interest in the welfare of the adult.
You might wish to write to or hold a meeting to consult. They may also have information about the adult that would be helpful to you.
5.51 It is essential for you to consult any joint guardian, unless you have agreed in advance that you will not consult each other about certain matters or consultation is impracticable in the circumstances for example, because the joint guardian is seriously ill.
Check your powers
5.52 If you decide that some action is needed, you should check whether your powers would cover that particular type of intervention.
5.53 You will only be able to intervene as guardian where you have been granted the powers to do so, but it may be that only the detailed examination of the adult's estate which you will undertake once appointed will highlight areas where your powers are deficient. It is therefore worth identifying those interventions which you consider necessary but which are not included within the scope of your powers. The Public Guardian, or your solicitor, can advise you whether it is worth applying to the sheriff to vary or add to your powers or to apply for an intervention order.
Consultation on your draft management plan
5.54 When you have reached the stage of a draft inventory and management plan, although this is not required by the Act, it would be good practice to let the adult and relevant others see the documents in draft before submitting them to the Public Guardian. This will provide an additional check that you have not overlooked any important property, or area of management. It will also help to identify any areas of possible conflict between yourself as financial guardian and others.
For example, someone with welfare powers may think you should be spending more on present needs, rather than saving against the future or that you are not maximising the adult's potential to manage some aspects of his or her finances.
5.55 If you have taken professional advice, you may also wish to seek the views of your professional adviser or advisers.
5.56 You should highlight for the adult any proposals that will have a particular impact on his or her day to day life.
For example, if you are proposing to sell items of furniture which are not needed but with which the adult is very familiar, the adult may react badly if the items suddenly disappear. Or if the adult has decided that a particular person should have a treasured item after he or she moves into residential care, this wish should be taken into account. Also take account of relevant past wishes and feelings.
5.57 If the adult has communication difficulties, the guide in the Annex 1 may help.
5.58 You should also ascertain the views of the nearest relative or anyone nominated by the sheriff to act in place of the nearest relative, primary carer and named person. If the nearest relative is unable to respond, 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 is unable or unwilling to give views, then you may not be able to ascertain the primary carer's views, but you should do so as far as is reasonable or practicable.
5.59 You are obliged to ascertain the views of any joint guardian, and of any person appearing to you to have an interest in the finances or property of the adult and who has made their views known in so far as it is reasonable and practicable to do so. Such a person is likely to have made their interest known to you and to be willing to express views.
5.60 Finally, 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 or her property and financial affairs, and to develop new such skills. That means you should discuss with the adult, and put in your management plan, any proposals for delegating areas of management to the adult, such as the spending of small amounts of pocket money, paying small bills, taking responsibility for an annual clothing allowance, etc.
SUBMITTING THE INVENTORY AND MANAGEMENT PLAN
5.61 Once you have submitted the inventory and management plan, the Public Guardian may approve it or approve it with amendments. If you disagree with the Public Guardian's decision, you can appeal to the sheriff, whose ruling will be final.
5.62 Before submitting the inventory and management plan, as indicated above, you will only have power to:
- ingather and take control of the assets of the adult's estate so as to enable you, when the management plan has been approved, to deal with them.
For example, this could mean that you have to put property into your name, as a guardian on behalf of the adult, for example, a bank account - for the purpose of paying for the adult's day to day needs. Or, it could also mean that the guardian takes physical control - for example a bank card/book, stock and share certificates, antique furniture, etc., for protection, but will be unable to 'intromit'.
- make such payments as are necessary to provide for the adult's day to day needs.
5.63 The Public Guardian can, however, authorise you to exercise any function within the scope of your authority before the management plan is approved if it would be unreasonable for you to delay exercising that function.
For example, if the adult had suddenly lost capacity because of an accident, and could no longer run a business, it would not be reasonable to have to delay dealing with the adult's business until after approval of the management plan.
5.64 As a financial guardian you have to keep records of the exercise of your powers. You have to satisfy the accounting requirements set out in paragraph 7 of Schedule 2. You may need the help of an accountant to prepare your accounts.
5.65 In order to ensure that accounts do not present you with undue difficulty as you reach the deadline for submission, you should keep systematic records and retain relevant documents on a file which you retain for this purpose. These might include:
- 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 any purchases incurred on behalf of the adult;
- receipts for any sales made of the adult's property;
- any correspondence with the Inland Revenue 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;
- certificates or other evidence of ownership of stocks and shares;
- actual life assurance or insurance policies and valuations certificates of any particular valuable items;
- title deeds or the land certificate of any heritable property owned or acquired by the adult;
- documents relating to any loan incurred by the adult; or any insurance policy.
5.66 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.
5.67 You should keep all receipts for significant purchases on behalf of the adult and any guarantees or insurance policies in respect of purchases so that you can exercise the adult's rights as purchaser to have property repaired or replaced.
ONGOING FUNCTIONS AS A FINANCIAL GUARDIAN
Make sure you can be contacted
5.68 You should ensure that the adult, the nearest relative or anyone nominated by the sheriff to act in place of the nearest relative, the primary carer, the named person the welfare guardian (if any) and any other person with an interest in the welfare of the adult, is readily able to contact you. You should make available to all of these your full contact details, including any other names by which you may be known, your preferred contact address, telephone number, fax and e-mail, your emergency contact details and the name and contact details of any other person who can get a message to you quickly. You should warn the persons who have your contact details in relation to your functions as guardian if you are likely to be unavailable for any period of time.
DELEGATION OF FUNCTIONS
5.69 You may expressly delegate functions and tasks to one or more persons at any time. For example a guardian may arrange for a care worker to buy food and for a daughter to pay household bills. However, you remain responsible. If you ask someone else to carry out any of your functions as guardian, you have responsibility for ensuring that this is carried out properly. Where functions are delegated to someone else you should make every effort explain this to the adult.
NOTIFYING THE PUBLIC GUARDIAN (SCOTLAND) ( OPG) OF CHANGE OF CIRCUMSTANCES
5.70 The OPG must be informed if any of the following changes occur:
- if you or the adult changes address, you have a responsibility to notify the Public Guardian within 7 days under section 64(4) of the Act;
- if the guardian dies, his/her personal representative should notify the Public Guardian (under section 75A). This is to ensure that the registers maintained by the Public Guardian are kept up to date;
- if the person dies you should notify the Public Guardian;
- if the adult regains capacity the guardianship order should be recalled and you should notify the Public Guardian of your intention (see Chapter 7);
- if you need to resign your appointment - see chapter 7.
HOLDING REGULAR REVIEW MEETINGS
5.71 You should ensure that you meet the adult, the nearest relative or anyone nominated by the sheriff to act in place of the nearest relative, the primary carer, the named person, the welfare guardian and any other person with an interest in the welfare of the adult at appropriate intervals. The frequency of such review meetings will depend on the extent of your day to day contact with these individuals but it would normally be good practice to hold a review at least once every six months. Your management plan should disclose your proposals in this respect.
Monitor the adult's property and financial affairs
5.72 It is your responsibility, within the scope of your powers, to monitor the adult's property and financial affairs.
For example, if it is within the scope of your powers to rent out property owned by the adult, 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.
5.73 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.
Determining the need for changes to the management plan
5.74 Either as a result of your own monitoring, or because you are approached by the Public Guardian or someone else with an interest, you may determine that the management plan requires amendment.
5.75 The process for proposing an amendment to the management plan is similar to that you will have carried out initially. Briefly, for each proposal, you must observe the principles, check that your powers as guardian will permit you to take the action or decision in question, and record what you have done.
SEEKING THE ADVICE OF THE PUBLIC GUARDIAN
5.76 Although you will be given set accounting intervals by the Public Guardian, it is a good idea to contact the Public Guardian if in doubt at any time about the scope of your powers, or about the course of action you propose to take. The Public Guardian's contact details are given Annex 3. The Public Guardian has a duty to provide guardians with information and advice about the performance of their functions, when requested to do so.
5.77 If you cannot obtain the information you need because of inadequacy of your powers as guardian, you might refer the matter to the Public Guardian, take legal advice, seek an extension of your powers in relation to the information in question, or consider applying for an intervention order.
WHAT TO DO WHERE THERE ARE CONFLICTING VIEWS ON YOUR PROPOSALS
5.78 When you hold reviews with the adult, prepare in advance by consulting everyone to be involved. This will help everyone's views to be given proper consideration at the meeting. The reviews will include the adult, the nearest relative etc. Do not take action that will come as a surprise to the others but make sure that you have taken proper account of their views.
5.79 Despite your best efforts, however, there may occasionally be disagreements which cannot be readily resolved.
For example, there may be a dispute as to how the adult'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 or be more influenced by someone with an interest in the adult's welfare who believes that more money should be spent on the adult's present needs.
5.80 In seeking to persuade others of your point of view, you should direct those who disagree with you to your statutory responsibilities as guardian, to the powers that the court has conferred on you as guardian and for which you are accountable. It will assist you if you can show that:
- you have applied the principles systematically;
- you have balanced one principle against another in a reasonable manner.
For example, you need to consider benefit to the adult as well as minimum intervention. If someone who disagrees with you takes minimum intervention as a starting point, they may be attaching insufficient weight to the need to benefit the adult.
- You have taken account of the past and present wishes and feelings of the adult so far as these can be ascertained.
- You are aware of the need to take account of the views of the nearest relative or anyone nominated by the sheriff to act in place of the nearest relative, primary carer, named person and anyone else appearing to you to have an interest in the welfare of the adult 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, and it does not agree with the majority.
5.81 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 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.
5.82 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 adult down if you gave in for the sake of peace; or gave up being guardian in the face of opposition.
5.83 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 guardian
5.84 As guardian, you may be someone close to the adult 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 guardian may be someone close to the adult and this situation will not be uncommon.
For example, if you are living in the same household as the adult 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 be conscious that expenditure on the adult's welfare will diminish the residual estate.
5.85 In these as in all other circumstances you should observe the principles. Ask the adult's opinion and consult anyone else with an interest in the adult's property or financial affairs and welfare. If the adult cannot express an informed opinion, consider what the adult would have done had he or she remained capable.
For example, if the adult was anxious to invest for your or your children's future, then you should continue that practice, provided it is not done at the expense of the adult's current welfare needs.
5.86 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 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 adult's resources;
- consult the Public Guardian;
- seek directions from the sheriff under section 3(3) of the Act.
WHAT TO DO WHERE YOUR POWERS ARE INSUFFICIENT
5.87 You may find that your powers are insufficient to carry out steps which become necessary. For example, the time may come to sell the adult's house so that he or she can move into residential care, but the Court may not have granted you powers to deal in heritable property. You may find that the adult has a legal entitlement, but your powers do not allow you to claim it (or alternatively to renounce it) on his or her behalf. You may find that the adult's estate has grown larger than anticipated and powers not included in the guardianship order become necessary.
5.88 If you find that your guardianship order is inadequate in a number of ways, for example because of drafting flaws in the original document, or a significant change in the adult's means (say, a large inheritance or settlement of damages) you may need to apply to the sheriff for a variation of your guardianship order or for an intervention order.
5.89 Before taking such a step you will need to apply the principles to ensure that extension of your powers is indeed justified and necessary.
WHAT IF THERE IS A COMPLAINT AGAINST YOU?
5.90 If someone has a complaint against you, and either does not put it to you or is not satisfied with your response, he or she has recourse to the Public Guardian. The Public Guardian has a duty to receive and investigate all complaints regarding the exercise of functions relating to the property or financial affairs of an adult made in relation to guardians.
5.91 The Public Guardian will contact you about any complaint received and ask you for your version of the facts. If you have applied the general 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.
POSSIBLE COURT PROCEEDINGS IN THE EVENT OF A COMPLAINT
5.92 A person who is dissatisfied with your actions as guardian 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 adult. You can also apply for directions under section 3(3).
5.93 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 or her view of what is required by the principles in the situation which has been set out.
5.94 In extreme cases the sheriff can revoke your powers or some of them.
Appointment of an additional guardian
5.95 Joint guardians have already been mentioned. It is also possible in the course of a guardianship order for someone else to apply to be appointed an additional guardian. The role of an additional guardian is the same as that of a joint guardian, but instead of its being foreseen at the outset, a fresh application to the sheriff is needed. This follows exactly the same procedure as the original application. This means that fresh reports of incapacity will be needed if the reports which accompanied the original application are more than 30 days old.
5.96 If you are finding the role of guardian onerous, and someone else is giving you a great deal of support in that role and may be prepared to share it with you, then you might wish to consider asking that person to apply to be an additional guardian. Alternatively, this could wait until the time comes to renew your own appointment, to avoid the additional trouble and expense of obtaining fresh reports to support such an application.
REIMBURSEMENT AND REMUNERATION OF FINANCIAL GUARDIAN
5.97 As guardian, you may claim for the expenses you incur in carrying out your duties. Section 68(1) of the act provides that a guardian shall be entitled to be reimbursed out of the estate of the adult for any outlays reasonably incurred by him/her in the exercise of his/her functions.
5.98 When you assume your duties as guardian, you should be clear about what you are entitled to by way of expenses and/or remuneration. You may need to seek the advice of the Public Guardian or be guided by any information leaflets she issues. In dealing with the adult's finances and your own expenditure as guardian, you should keep records.
5.99 Financial guardians who have considerable responsibility in the managing of an adult's estate may be remunerated unless the sheriff directs otherwise. For example, a professional person such as a lawyer or an accountant may be managing a large estate using professional expertise and the firm's time. The Public Guardian will set the level of payment, taking into account the adult's resources. Accounts submitted by the guardian will be settled at a fixed time, the end of the accounting period. The Act however allows for interim payments to be made if the accounting period is long and the guardian might encounter hardship in waiting.
5.100 Section 69 of the Act states that the guardian will forfeit awarded remuneration if found in breach of the duty of care or fiduciary duty to the adult or of contravening any obligation imposed by the Act. The sheriff on receiving a report from any person claiming to have an interest in the property, financial affairs or personal welfare of the adult, can order the penalty of losing all or part of the remuneration.
5.101 Section 81 of the Act requires those who have powers to act on behalf of the adult, i.e. continuing attorney, welfare attorney, withdrawer, guardian, person authorised under an intervention order, managers of authorised establishments to refund to the adult with interest, any funds which they misuse. Section 82 clarifies the limits of liability of those with responsibility for an adult's financial affairs. See paragraph 1.22.
5.102 Your expenses as guardian will be an additional burden on the adult's estate. Obviously you should keep your expenses to the minimum necessary. You can discuss any concerns with the Public Guardian, remembering that the adult or anyone else with an interest may also raise the matter with the Public Guardian if he or she thinks the repayments to you are unfair.
SUPERVISION BY THE PUBLIC GUARDIAN (SCOTLAND)
5.103 The Act requires the Public Guardian to supervise financial guardians. Supervision is intended to the ensure that guardians 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.
5.104 Upon appointment you will be sent a certificate of appointment. This will not be issued until the Public Guardian is satisfied that any caution (insurance) or, alternative form of security required by the court has been found. You will require to lodge an accounting of your transactions with the adult'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 start 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.
5.105 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 will 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.
5.106 Should the Public Guardian not be satisfied with the account or records produced she will strive to resolve the matter with you but, ultimately may report her concerns to the court and seek to have your powers revoked.
5.107 Your account will be available for inspection by anyone with an interest in the adult's estate.
5.108 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 (see the next section for further information) or for the sale or purchase of any accommodation used or to be used as a dwelling house by the adult. The Public Guardian may also require you to obtain advice in relation to the investments retained by you on behalf of the adult.
5.109 If the Public Guardian considers it necessary she will consult the MWC and the local authority if there appears to be a common interest.
5.110 As financial guardian, you do not have an automatic right to make gifts out of the adult's estate. The Public Guardian is required to authorise any giving you wish to do on behalf of the adult. This is set out in section 66 which states:
- 66 (1) A guardian having powers relating to the property or financial affairs of an adult may make a gift out of the adult's estate only if authorised to do so by the Public Guardian.
5.111 You can apply to make a specific gift, for example a wedding present to an adult's favourite niece or you can apply for a wider authority to make recurring gifts, for example birthday presents to certain people. The application, in that instance, entails indicating what you regard as an acceptable amount to spend annually. You will obviously involve the adult, in so far as is possible, in deciding whose birthdays are to be marked and what sort of presents should be given. The same applies to Christmas presents. However, the Public Guardian will not require you to seek permission for example, for small birthday, anniversary, wedding presents of a value of less than £100 each.
5.112 There is an application form for authorisation to make a gift and the Public Guardian has to notify various people of the fact that she has received an application. They are the adult, the nearest relative, the primary carer, the adult's named person and any other person who the Public Guardian considers has an interest. She has to advise them of the period of time in which they may object to the granting of the application and he has to hear any objections. The Public Guardian can, however, decide that the value of the gift is not sufficient to justify such intimations.
5.113 It is also possible that the proposed gift could be substantial and form part of a tax-planning strategy. The Public Guardian will require such proposed gifts to be intimated to the adult, primary carer and others with an interest and will require the guardian to clearly display the benefit being obtained by the proposal and the past and present wishes of the adult in regard to that matter.
5.114 If the Public Guardian decides against granting the authority to make a gift for whatever reason, in telling the guardian she must allow for a period in which the guardian can object to the refusal and the objections be heard.
5.115 The Public Guardian may refer an application to the sheriff for a decision if she considers it appropriate to do so. She is likely to exercise this right only if the making of a particular gift is controversial or if the guardian requests that the sheriff decides on an application or if someone has objected to the application. If the Public Guardian declines to grant an application or to put an application to the sheriff when requested, her decision may be the subject of an appeal to the sheriff.
5.116 The principles of the Act require you to take account, as far as possible, of the present and past wishes and feelings of the adult, but you cannot give the gift unless you have approval from the Public Guardian. If the adult is very insistent and you are not sure whether it would be right for you as guardian to make the gift in the circumstances, you could seek the advice of the Public Guardian. The Public Guardian may reassure you that the gift is one she could readily approve, but it is your decision whether to apply or not.
DEALING IN HERITABLE PROPERTY
5.117 Special provisions apply where you obtain a guardianship order to deal in heritable property (normally land or buildings). Under section 61 of the Act you must apply to the Keeper of the Registers of Scotland to record the 'interlocutor' (court judgement) containing the order in the General Register of Sasines, or the Land Register of Scotland. Guidance is available from the Keeper's Customer Services Centres (see Annex 3) or at www.ros.gov.uk.
5.118 Under Schedule 2 paragraph 6, if you are financial guardian with power which vests in you any right of the adult to deal with, convey or manage any interest in the adult's heritable property, you may not decide in principle to sell or buy accommodation for the adult without the approval of the Public Guardian. The Public Guardian will give the opportunity to the nearest relative, primary carer, named person and others involved with the adult to object to such an application within a prescribed period. If no objections are received, the Public Guardian may decide the application but if she refuses, she will give you an opportunity to be heard, and you can appeal to the sheriff. If objections are received, the Public Guardian will remit the application to the sheriff whose decision will be final. She may also decide to remit the application to the sheriff even if no objections are received.
5.119 Having obtained agreement in principle to buy or sell accommodation for the adult, you will still have to obtain the Public Guardian's approval for the actual price you propose to pay or accept. The Public Guardian's decision on this will be final, but she will be willing to discuss with you any problems you are experiencing over obtaining an adequate selling price, or purchasing accommodation within the sum available.
TEXT OF SCHEDULE 2 OF THE ACT
1 (1) A guardian with powers relating to the property and financial affairs of the adult shall, unless the sheriff otherwise directs, prepare a plan (a 'management plan'), taking account of any directions given by the sheriff in the order appointing him, for the management, investment and realisation of the adult's estate and for the application of the estate to the adult's needs, so far as the estate falls within the guardian's authority.
(2) The management plan shall be submitted in draft by the guardian to the Public Guardian for his approval, along with the inventory of the adult's estate prepared under paragraph 3, not more than one month, or such other period as the Public Guardian may allow, after the submission of the inventory.
(3) The Public Guardian may approve the management plan submitted to him under sub-paragraph (2) or he may approve it with amendments and the plan as so approved or as so amended shall be taken account of by the guardian in the exercise of his functions in relation to the adult.
(4) Before the management plan is approved, the guardian shall, unless the sheriff on appointing him has conferred wider powers, have power only to -
(a) ingather and take control of the assets of the adult's estate so as to enable him, when the management plan has been approved, to intromit with them;
(b) make such payments as are necessary to provide for the adult's day to day needs.
(5) The Public Guardian may authorise the guardian to exercise any function within the scope of his authority before the management plan is approved, if it would be unreasonable to delay him exercising that function until the plan had been approved.
(6) The guardian shall keep the management plan under review and shall put forward to the Public Guardian proposals for variation of it whenever it appears to him to be appropriate.(7) The Public Guardian -
(a) may at any time propose any variation to the management plan; and
(b) shall review the plan whenever the guardian submits his accounts for audit.
(8) The Public Guardian shall notify the guardian of any variation which he proposes to make to the management plan and shall not make any such variation without affording the guardian an opportunity to object.
(9) Having heard any objections by the guardian as mentioned in sub-paragraph (8) the Public Guardian may make the variation with or without amendment.
Directions from sheriff
2 Where the guardian disagrees with any decision made by the Public Guardian in relation to a management plan prepared under paragraph 1, he may apply to the sheriff for a determination in relation to the matter and the sheriff's decision shall be final.
Inventory of estate
3 (1) A guardian with powers relating to the property or financial affairs of the adult shall, as soon after his appointment as possible and in any event within 3 months of the date of registration of his appointment or such other period as the Public Guardian may allow, submit to the Public Guardian for examination and approval a full inventory of the adult's estate in so far as it falls within the scope of the guardian's authority, along with such supporting documents and additional information as the Public Guardian may require.
(2) The inventory shall be in a form, and contain information, prescribed by the Public Guardian.
(3) Errors in and omissions from the inventory which are discovered by the guardian after the inventory has been approved by the Public Guardian shall be notified by him to the Public Guardian within 6 months of the date of discovery or when submitting his next accounts to the Public Guardian, whichever occurs sooner.
(4) The Public Guardian may dispense with the need for the guardian to submit an inventory under sub-paragraph (1) or may require the guardian to take such other action as he thinks appropriate in lieu of submitting an inventory.
4 The guardian shall deposit all money received by him as guardian in a bank or a building society in an account in the name of the adult and shall ensure that all sums in excess of £500 (or such other sum as may be prescribed) so deposited shall earn interest.
Powers relating to investment and carrying on of business by guardian
5 (1) Subject to the following provisions of this paragraph, a guardian with powers relating to the property or financial affairs of the adult shall be entitled -
(a) after obtaining and considering proper advice, to retain any existing investment of the adult;
(b) to use the adult's estate to make new investments in accordance with the management plan prepared under paragraph 1 or with the consent of the Public Guardian.
(2) For the purpose of sub-paragraph (1) -
(a) proper advice is the advice of a person authorised to carry on investment business in the United Kingdom for the purposes of the Financial Services Act 1986 (c.60) who is not the guardian or any person who is an employer, employee or business partner of the guardian; and
(b) the advice must be given or subsequently confirmed in writing.
(3) The guardian shall keep every investment under review and in doing so shall have regard to the following principles -
(a) that the investment must be prudent;
(b) that there must be diversification of investments; and
(c) that the investment must be suitable for the adult's estate.
(4) The Public Guardian may at any time direct the guardian to realise any investment.
(5) The guardian may, subject to any direction given by the Public Guardian, carry on any business of the adult.
(6) Any decision by the Public Guardian -
(a) under sub-paragraph (4) as to directing the guardian to realise investments;
(b) under sub-paragraph (5) as to giving directions to the guardian in carrying on the business of the adult,
may be appealed to the sheriff, whose decision shall be final.
Purchase or disposal of accommodation
6 (1) The guardian shall not, without the consent of the Public Guardian -
(a) in principle; and
(b) to the purchase or selling price,
purchase accommodation for, or dispose of any accommodation used for the time being as a dwelling house by, the adult.
(2) On receipt of an application for consent in principle under sub-paragraph (1)(a) in the prescribed form, the Public Guardian shall intimate the application to the adult, his nearest relative, his primary carer, named person and any person who the Public Guardian considers has an interest in the application and advise them of the prescribed period within which they may object to the granting of the application.
(3) The Public Guardian shall remit any objection under sub-paragraph (2) for determination by the sheriff (whose decision shall be final) and -
(a) if the sheriff upholds the objection, shall refuse the application;
(b) if the sheriff dismisses the objection, shall grant the application.
(4) Where the Public Guardian proposes to refuse the application other than under sub-paragraph (3)(a) he shall intimate his decision to the applicant and advise him of the prescribed period within which he may object to the refusal; and he shall not refuse the application without affording the applicant, if he objects, an opportunity of being heard.
(5) Having heard any objections as mentioned in sub-paragraph (4) or where there is no objection as mentioned in sub-paragraph (2), the Public Guardian may grant the application.
(6) The Public Guardian may at his own instance or at the instance of any person who objects to the granting or refusal (other than a refusal under sub-paragraph (3)(a)) of the application remit the application to the sheriff for determination by the sheriff, whose decision shall be final.
(7) If consent in principle to the purchase or disposal of the accommodation is given, the guardian shall apply to the Public Guardian for consent under sub-paragraph (1)(b) to the purchase or selling price.
(8) A decision of the Public Guardian -
(a) to grant or to refuse (other than under sub-paragraph (3)(a)) an application; or
(b) to refuse to remit an application to the sheriff under sub-paragraph (6), may be appealed to the sheriff, whose decision shall be final.
(9) A decision of the Public Guardian to give or to refuse consent under sub-paragraph (1)(b) shall be final.
7 (1) A guardian with powers relating to the property or financial affairs of the adult shall submit accounts in respect of each accounting period to the Public Guardian within one month from the end of the accounting period or such longer period as the Public Guardian may allow.
(2) There shall be submitted with the accounts under sub-paragraph (1) such supporting documents as the Public Guardian may require, and the Public Guardian may require the guardian to furnish him with such information in connection with the accounts as the Public Guardian may determine.
(3) For the purposes of this paragraph, the first accounting period shall commence with the date of appointment of the guardian and end at such date not later than 18 months after the date of registration of the guardian's appointment as the Public Guardian may determine; and thereafter each accounting period shall be a year commencing with the date on which the immediately previous accounting period ended.
(4) Notwithstanding the foregoing provisions of this paragraph, the Public Guardian may at any time -
(a) give directions as to the frequency of accounting periods;
(b) dispense with the need for the submission of accounts by the guardian; or
(c) require the guardian to do anything which the Public Guardian thinks appropriate in lieu of submitting accounts.
(5) The accounts shall be in such form as is prescribed by the Public Guardian and different forms may be prescribed for different cases or descriptions of case.
(6) Where the estate of the adult includes a business or an interest in a business that part of the accounts which relates to the business or to the interest in the business shall be accompanied by a certificate from such person and in such form as may be prescribed by the Public Guardian, certifying the accuracy of that part of the accounts.
(7) The accounts submitted to the Public Guardian under sub-paragraph (1) (other than any part to which a certificate as mentioned in sub-paragraph (6) relates) shall be audited by the Public Guardian or by an accountant appointed by, and responsible to, the Public Guardian for that purpose.
Approval of accounts
8 (1) After the accounts of the guardian have been audited, the Public Guardian shall, if the accounts appear to him -
(a) to be a true and fair view of the guardian's management of the adult's estate, approve them and fix the remuneration (if any) due to the guardian;
(b) not to be a true and fair view of the guardian's management of the adult's estate, prepare a report as to the extent to which they do not represent such a true and fair view and adjusting the accounts accordingly.
(2) The Public Guardian may approve the accounts, notwithstanding any minor inconsistencies or absence of full documentation in the accounts, if he is satisfied that the guardian acted reasonably and in good faith.
(3) The Public Guardian shall send any report prepared by him under sub-paragraph (1)(b) to the guardian, who may object to anything contained in the report within 28 days of it being sent to him.
(4) If no objection is taken to the report, the accounts as adjusted by the Public Guardian shall be regarded as approved by him.
(5) Where any objection taken to the report cannot be resolved between the guardian and the Public Guardian, the matter may be determined by the sheriff on an application by the guardian, and the sheriff's decision shall be final.
(6) Without prejudice to sub-paragraph (7), the guardian shall be liable to make good any deficiency revealed by the accounts as approved by the Public Guardian under sub-paragraph (1)(a).
(7) Where a deficiency is revealed as mentioned in sub-paragraph (6), the Public Guardian may require the guardian to pay interest to the adult's estate on the amount of the deficiency at the rate fixed by Act of Sederunt as applicable to a decree of the sheriff in respect of the period for which it appears that the deficiency has existed.
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