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Court of Protection Bonds does anyone have knowledge of how these work?

(12 Posts)
mrsmata Sun 27-Sep-15 01:29:21

This is going to be quite long as there is a lot of background information and I don't want to drip feed -so I will apologise now!

Some years ago my mum had a very serious stroke and for a long time it was touch and go. Anyway she has survived but is now paralysed from the chest down and has never regained any speech or reliable means of communication. She is in a specialist home requiring 24/7 care. Occasionally when she has a visitor she smiles at them but mostly she doesn't and is just vacant. Since her stroke we have never been able to ascertain if she even recognises us as her family anymore - it's all very sad but it is what it is.

My mum and dad have their own bank accounts which their state pensions are paid into and a joint account which my dad's not inconsiderable private pension is paid into, my dad also has an occasional income from self-employment which also goes into their joint account.
They are not massively wealthy but have always been and still remain more than comfortable financially.

When my mum first had the stroke my dad saw a solicitor about how to manage finances at the time mum was in a coma and he was advised that power of attorney wasn't possible as she would not have capacity to agree.
Since then my dad has paid for anything my mum has needed out of their joint account (except for her care home fees which are state funded given her condition) so has only used his own finances. He pays for her to have someone come and do her hair twice a week; she has a manicure twice a month; he pays for all her toiletry needs such as deodorant, shower gel, toothpaste, hairspray, moisturiser etc..; all her clothing plus luxuries that she always liked to have such as nice perfume and pretty accessories for her room. She is as well looked after as she can possibly be given her circumstances. He always likes her to look nice and she is visited every day by a member of the family on a rota so we all know he is as good as his word - she's always immaculate and the room she lives in is lovely.

My dad recently went to see a solicitor about adding power of attorney to his own will for myself and my brother should anything happen to him as it's worried him on and off for the past few years. He also changed his will at the same time to leave the house (which is only in his name) and all his assets to be split equally between myself, my brother and my aunt as my mum is secure where she is for the rest of her life now and will not need the benefit. I must say that it's taken my dad a long time to come to the realisation that mum is never ever going to get any better as he held out hope that she would for years and he did not come to this decision lightly.

The solicitor (a different one to the first) was more than a bit concerned that my dad has no legal rights to make any decisions financially or otherwise regarding mum.
My dad has no access to my mum's bank account and her pension is still paid in every month so she has a fair amount sitting there now. Every penny he's spent on her since her stroke has come from his own funds although the account he uses is in joint names.

This second solicitor has suggested my dad apply to The Court of Protection to become mum's deputy and be able to access her money and use this for her needs. However - and this is the crux of my question here - the solicitor said that my dad would need to pay an application fee and then an annual fee to the court plus an annual bond to safeguard against maladministration of mum's affairs.

Although my dad has discovered that he'd need to pay between £400 and £900 for the application fee plus an annual fee of £320 for the supervision fee (which he's more than happy to do) he remains unable to work out how much the bond would cost.
He phoned the court of protection and was told that the bond depends upon the size of the assets and also is not refundable upon mum's death or his death which has really confused him and me as our understanding of a bond is that it works as a form of deposit which would cover compensation if my dad didn't act in mum's best interests although so far he's done no such thing.

Therefore he could clearly stand to lose a lot of money in the future through this as we have no idea what level this bond could be set at. Also if anything happened to my dad then my brother and I would then need to go through the whole process of application again.
My mum has no ongoing health problems so there is no reason why she shouldn't live another 20 or so years in her current state even though at present she just exists rather than having a meaningful life.

Does anyone know how much these bonds are and if there are any scales of charges? Also are they truly non-refundable because that seems rather unfair to the family paying them if there is no fraudulent activity.

The alternative seems to be that dad continues as he is doing with him paying for everything she needs and then leaving my brother and I with the problem of sorting mum's affairs out if he goes before she does. This is something he's quite uncomfortable with as it just passes the problem on rather than solving it.

Can anyone help or advise at all ?

Thank you if you made it to the end of my mammoth post!

UptownFlunk Sun 27-Sep-15 02:21:27

Firstly, sorry to hear about your mum, that must have been so hard for you all. Your dad sounds like a very loving husband.

To answer a few of your questions. A security bond is paid out of the estate of the person who has lost capacity - ie your mum - not out of the estate of the person who becomes deputy. The same is true for all the other fees, they will come out of your mum's money though your dad may have to pay the first bond/fees up front and then be paid back by your mum once the deputyship has gone through and he has access to her funds.

The court sets the bond amount according to the value of the estate, I'm not sure of the sliding scale but I am deputy for a relative of mine and my relative's estate is roughly £350,000. The security bond was set by the Court of Protection at roughly £500. It goes down a little each year (not much) but it is not a one off fee, it has to be paid yearly, like an insurance premium - so does the 'administration fee'.

As things stand, if your dad was to die before your mum, your mum would be in a sort of legal/financial limbo. How would her incidental expenses be paid whilst your dad's estate was going through probate for instance? Would you/your brother be able to pay them during this time? I know her care fees are paid for but what if some unforeseen bill arose that was quite large and you didn't have access to her funds - say she had to be moved for some reason, or needed private medical care or the purchase of some equipment would be of great help to her?

In addition to this, it doesn't really sound as if the best use is being made of her money if it just piling up in one account. What about moving it into accounts with better rates of interest? You'd be surprised how money can build up when someone isn't spending anything. What's going on with regard to tax - does she need to submit a tax return or is she anywhere near the inheritance tax threshold (unlikely now the threshold's been raised quite high but it's possible). If a deputy (or deputies) was appointed then these issues could be investigated. There's also the question of a will, has she made one? If not then the Court of Protection could assist with the drawing up of a statutory will as part of the deputyship process and this could save a lot of hassle in the future due to intestacy.

If your dad does decide to apply for deputyship then, rather than you have to go through the process again should he die before your mum, you and/or your brother could become deputies with him. If you are joint & several deputies as opposed to just joint deputies he could act without needing your signatures/agreement as well while he was alive (as could you/your brother though it might be best just to leave him to it) but if something was to happen to him you would already be deputies so wouldn't need to apply again and you could use the existing authority to look after your mum's affairs.

Hope this has been of some help to you. One thing I would definitely recommend is that while you are discussing all this with your dad try and get him to set up Power of Attorney for himself so that if anything happens to him & he loses capacity you don't have to go through the much more expensive and time-consuming route of applying for deputyship.

mrsmata Sun 27-Sep-15 11:29:45

Thank you for your advice - that has really helped a lot smile

I think the joint / several deputyship sounds the easiest and most cost effective way to move forward.

My mum's estate is just over £100,000 and at the moment it is just sitting in an account being added to each month when it should really be used for her ongoing needs or as you say any unexpected expenses that we haven't yet thought of.

She doesn't need to fill out a tax return - we did check when she first had her stroke and she does have a will so we have no concerns there - the only thing lacking was the Power of Attorney. My dad has now included POA in his will as have DH and I in ours.

stevemLS1 Wed 30-Sep-15 23:35:39

I'm not sure what you mean by "included POA in his Will".

An LPA is entirely separate from a Will and, in fact, ceases to have effect on death.

It needs to be executed by a mentally capable donor and registered at the OPG.

mrsmata Thu 01-Oct-15 22:30:26

stevemLS1 That's just me wording the process badly - I know it is a separate document and that it only applies up to death.

What I mean is that he put it in place at the same time as he made his new will and that we are all aware of it existing and what his wishes are - and we did the same for ourselves too so it avoids any of us being in the same position in the future.

UptownFlunk Mon 05-Oct-15 19:43:19

You're welcome, really glad to have been of help and to hear that your dad (and you and your DH) have organised POAs - so many people don't and it's a really important document if things go wrong.

I think joint & several deputyship sounds like a good idea. Remember though that all of you can act independently of the others so if there's any family issues (gambling, shopping addiction or just differences of opinion on what to do with funds) this can be a problem. Having said that, I am a joint & several deputy but the other deputy appointed with me is just there in case I am ill or something happens to me and doesn't take any part in decisions. I live closer to my relative so it's easier for me to deal with everything and we've always been very close. In our case the whole thing works really well.

If you have any other questions etc then don't hesitate to ask. I paid a solicitor to submit our deputyship application but, in retrospect, with a bit of research I could probably have done it myself and saved a lot of money. At the time I was very stressed and time-pressured though so it was probably better for me to leave it up to the experts and concentrate my time on caring for my relative.

mrsmata Sat 17-Oct-15 22:54:11

Thanks again UptownFlunk your advice has been appreciated.

We have decided to go down the joint/several deputyship route with my dad, brother and I all named as deputies. Although until anything happens to dad he will continue to manage everything. He does a fantastic job at the moment and the view of my brother and I is if it's not broken don't fix it!

My dad decided he wanted to instruct the second solicitor he saw to deal with the application and all the paperwork as he didn't feel confident enough to complete it all by himself. We are more than happy to let him take the lead and do what he is comfortable with. He has been quoted £1,000 +VAT plus the court fees which we all feel is reasonable.

The solicitor has moved things on very quickly and my mum has already been assessed by a doctor who agreed that she does lack capacity to deal with her own affairs - no surprise there to anyone but it needed to be done.

The application has been submitted so now we just have to wait for it to be progressed - we've been told to expect it to take at least 3 months and possibly as long as 6, but if there are no complications or objections (and none are foreseen) then it should be sooner rather than later.

Once again thank you for taking the time and trouble to share your knowledge and experience it really has helped.

ProfessorPreciseaBug Sat 09-Jan-16 07:38:11

Very glad to hear things are starting to settle. How are you gettng on with the application?

mrsmata Sat 16-Jan-16 01:39:19

Everything has now been submitted to the court and we are just awaiting their approval / decision.
As it has been a while now we assume no news is good news but you never know do you?
In the meantime we have just continued as before with my dad covering all mum's costs and looking after her interests until everything is settled.

mrsmata Sat 23-Jan-16 22:36:21

Good news today smile
It's all gone through and been approved by the court of protection.

The bond has been set at £150 which is quite affordable and actually less than we'd expected it to be.

I am still none the wiser as to how these bonds are set or if they follow any scale of charges, but I don't suppose we'll ever find out and we're not about to argue as it's all worked out fine.

My dad bless him, is very happy that he now has proper legal authority to deal with mum's finances and also relieved that it will simply pass over to my brother and I with no complications should she outlive him.

I know I've said it before, but huge thanks again for the advice I received on this thread - it really did give us the confidence to move forward with this and it should hopefully make all our lives easier from now on.

ProfessorPreciseaBug Sun 14-Feb-16 09:15:50

That is good news.
Does the Court want have to Form OPG102 submitted?

mrsmata Sat 20-Feb-16 00:55:15

Yes ProfessorPreciseaBug an annual report to the court is a requirement - so I assume this would be the standard OPG102.

Although we've spoken I haven't seen my dad since it was all sorted out and he has all the legal paperwork as he's the one who dealt directly with the solicitor - my brother and I just received documents to sign and return.

I didn't say in my earlier posts but I actually live just over 300 miles away from my parents, although I do speak to my dad pretty much daily and visit at least once a month.

My dad is thankfully quite good with technology despite being in his mid 80's and he uses Skype or Facetime at weekends and evenings when he's with my mum to keep me in touch so I know that everything is ok and they are both well.
We are there next weekend so I will go through everything we need to do then and make sure I know what is what.

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