REGULAR
Cash Flow Care
Tomorrow’s Care columnist, Richard Bates, partner and head of the later life team at Rix & Kay Solicitors, outlines the best ways to assist residents with their finances and protect your care business at the same time.
As a care sector owner or manager, it is crucial to be aware of your clients’ financial circumstances and also what future plans they have, if any, in respect of their finances.
Where your clients are private payers, it is important to determine whether they have funds available to pay your fees and whether they have the capacity to manage these funds on an ongoing basis.
Your clients may have varying levels of capacity. Some may be fully capable of managing their own finances. Others may require low level support or, in some cases, someone to take over their affairs completely. Even if someone is fully capable of managing their own finances, having arrangements in place for the future is vital if this should change.
When someone becomes incapable of managing their finances, bank accounts are effectively frozen as banks are unable to take instructions. If there is an attorney appointed then their affairs can continue to run smoothly, enabling the attorney to take over the management to ensure
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your fees can continue to be paid. If this is not the case, the situation is far harder to control in terms of your own cash flow and finance.
Just because a person cannot manage their finances or requires assistance, it doesn’t always mean they are unable to prepare a Lasting Power of Attorney (LPA). If they do have the capacity to sign such a document, it should be something which is put in place quickly. However, this process can still take two or three months while the LPA is registered at the Office of the Public Guardian (OPG) and then lodged with financial institutions. It is worth noting that an LPA cannot be used until it has been registered with the OPG.
If someone does not have the capacity to prepare an LPA, then an application will need to be made to the Court of Protection for a deputy to be appointed. This process is more complex and takes longer, often six months, during which time funds cannot be accessed.
With a deputyship application, the Court requires details about the person’s personal and financial
circumstances, as well as details in respect of the deputy’s circumstances, to ensure they are suitable. A deputy will be subject to the supervision of the Court of Protection and is required to provide annual reports with explanations of their actions.
Ideally, every client should have an LPA in place appointing attorneys to deal with their property and finances. As a care provider this is something you should be checking when taking on a new client. If they do have an LPA in place you should request a copy of this, so you know who the attorneys are should assistance be required. Do bear in mind that the forms changed this July, so they now have a different feel about them – they all do the same job though.
Some clients may have an ‘old style’ Enduring Power of Attorney, which only requires registration with the OPG when the person concerned is, or is becoming, mentally incapable of managing their affairs. Steps can be taken by the attorneys to manage and protect finances even if the client is mentally incapable, but the power is in an unregistered state.
www.tomorrowscare.co.uk
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