Managing finances following a brain injury It’s important that the finances and welfare of the most vulnerable members of our society are protected; that’s the job of the Court of Protection. When someone suffers a serious head or brain injury, their mental capacity can be affected and they may no longer be capable of making decisions for themselves. In such cases, a Court can appoint someone to make or help make decisions on their behalf and act in their best interests.
Q: What is a deputy? If someone becomes mentally incapable of handling their welfare and/or their property and financial affairs, and a Lasting Power of Attorney isn’t already in place, it’s necessary for the Court of Protection to appoint a deputy to manage those affairs on their behalf. A deputy looks after the best interests of the person who lacks capacity. The deputy’s responsibilities will include: • Budgeting • Arranging payments • Completing annual reports, accounts and tax returns • Liaising with healthcare and medical professionals • Buying, selling or adapting property • Applying for welfare benefits • Investing damages awards A deputy works closely with the client and, where appropriate, their family. They help them to make as many decisions as possible for themselves, empowering them to manage their own finances where possible.
Q: What do professional deputies do?
Q: What are Personal Injury Trusts?
A professional deputy is an independent and regulated alternative to appointing a family member or a friend. This would usually be a lawyer with specialist expertise in the Court of Protection process, mental capacity law, finances and investments. The professional deputy must act in accordance with the Mental Capacity Act 2005 and their role is very extensive. They’re responsible for liaising with the litigation solicitor during personal injury and clinical negligence claims. They’re also responsible for the budgeting and management of interim payments, agreeing the implementation and recommendations for care, therapies, accommodation, specialist equipment and associated work.
If someone has capacity to manage their finances, they should consider sheltering their award in a Personal Injury Trust (PIT).
Q: What happens when a claim settles?
A PIT provides a way of ensuring that individuals retain their entitlement to means tested benefits after receiving compensation for a personal injury.
Once a claim settles, any compensation award will need to be properly managed and budgeted – and wisely invested. This will require the deputy to advise on investment strategy and to appoint investment advisers. The deputy will review their performance and meet annually with an investment managers to oversee investment and risk strategy of the investments. The deputy will meet at least annually with the client (usually more) and/or his/her family and work closely with all individuals concerned to enable the client to make as many of their own financial decisions as possible.
Authorised and Regulated by the Solicitors Regulation Authority.
If someone claims means-tested benefits, any compensation money they receive may affect their entitlement to benefits and other statutory services. If their compensation, when added to the value of their own capital, exceeds fixed limit (such as money in a bank account, savings or investments), their means-tested benefits will reduce or may stop altogether. The law provides that personal injury compensation money which is held in trust for an individual’s benefit will normally be disregarded when assessing their entitlement to benefits such as Income Support, Tax Credits, Housing Benefit or Council Tax Benefit.
A well-drafted trust deed with supporting advice is a must in these circumstances.
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