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Handbook for Controllers appointed under the Mental Health (Northern Ireland) Order 1986

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Preliminary questions

Preliminary questions

What is the Court?

Responsibility for the management of the property and affairs of people in Northern Ireland who, through mental disorder, are incapable of managing their own financial affairs is vested in the High Court under the provisions of Part VIII of the Mental Health (Northern Ireland) Order 1986 [SI 1986/595 (NI 4)]. The “Patient” is the name given by the Order to a person who is suffering from mental disorder and whose financial affairs are subject to the Court’s control.

What is the Office?

The practice and procedure of the Court are defined in the Patients’ Affairs Rules which are set out in Order 109 and Appendix D of the Rules of the Supreme Court [SR1986 No 1841]. The Office of Care and Protection, referred to in this booklet as “the Office”, is the department of the Court in which administrative work relating to a Patient’s case is dealt with under the supervision of the Master (Care and Protection). The Master is the judicial officer of the Court who is authorised to exercise any discretion, power or other function of the Court and s/he may also, in particular cases, refer a question to the Judge for decision.

What is a Controller?

A Controller is a person appointed by the Court to deal with the day-to-day management of the Patient’s financial affairs. He or she can be a relative, a friend, or perhaps a professional adviser. If there is no one else suitable or willing to act, an officer of the Court or the Official Solicitor can be appointed in the last resort.

How is a Controller appointed?

If the Court is satisfied that there is a need for a Controller to be appointed and has received medical evidence confirming the Patient’s incapacity it will make an order appointing a Controller. This order gives details of the specific powers conferred on the Controller, which are usually quite limited. Additional orders or authorities may be issued by the Court from time to time varying or extending the Controller’s powers. Further details are given in the chapter on Powers of the Controller. It is usual for the person applying to be Controller to have to attend the Court.

How do I communicate with the Court?

Correspondence should be addressed to

The Office of Care and Protection
Royal Courts of Justice
Chichester Street
Belfast
BT1 3JF

and not to any individual by name. It is essential that the reference number is quoted, because this will avoid unnecessary delay. If you wish to come to the office to discuss the case you should please make an appointment beforehand.

Do I have to keep accounts?

Yes, in most cases annual accounts will have to be sent to the Office. For further details please see chapter on Controller’s accounts.

Will I get paid?

You will not get paid for exercising your duties as a controller. Only your reasonable out of pocket expenses, such as postage, can be charged to the Patient’s estate. There will be occasions when professional advice will be required. On these occasions prior approval to incur these additional fees should be sought. You should not employ a Solicitor or other professional person to do any work not usually requiring professional assistance.

Is any form of security required?

In the majority of Controllership cases a security bond is required to be taken out with a Guarantee Company. The premium is paid from the Patient’s Estate, and the sum insured is fixed by the Court and reviewed from time to time. This is simply a business precaution to safeguard both Patient and Controller.

How long will the Controllership last?

The Controllership will come to an end for one of the following reasons:

  • on the Court being satisfied that the Patient has recovered and is once again able to manage his or her own affairs;
  • if the Controller wishes to retire or if for some other reason it becomes necessary to appoint a new Controller;
  • if the Court agrees that it is no longer necessary to retain the services of a Controller;
  • on the Patient’s death.

Each of these situations is dealt with in detail further on in this booklet.

The Controller Order

Will I get a copy of the Order?

Yes, you will receive a sealed copy of the Order.

How important is the Order?

Very important. It is the documentary evidence of your authority to carry out your various duties and to exercise the powers granted by the Court.

What does “Registration” of the Order mean?

It is when you produce sealed copies of the Order appointing you Controller as proof of your appointment, for example, to Banks, Building Societies, the Social Security Agency and so on. Many of these organisations will mark the copies of the Order as having been registered with them.

What are sealed copies?

They are office copies of the Order appointing you Controller which have been impressed with the Seal of the Court.

Can I have more sealed copies if I have not got enough or if they are lost?

Yes, you can always ask for more sealed copies - there is no extra fee payable.

With whom should I register copies of the Order?

With all the sources from which income is due to the Patient (so that income (and any arrears) can be dealt with under the terms of the Order) and with all organisations with which capital is deposited or invested, for example, Banks, Building Societies, the National Savings Department, public companies and so on, so as to make arrangements regarding the interest earned. Remember that if you have employed solicitors they may have dealt with this for you.

Can I alter any mistakes, for example spelling mistakes, in the copies of the Controller Order?

No, you should not make any alteration yourself but return the copies to the office for amendment.

Do I need any other documents to prove I have been appointed Controller?

No, but you may need separate Orders or Directions to enable you to take specific action not covered by the Order.

Will the Order be recognised abroad?

It may be, but each country has its own requirements.

Must I comply with all the directions given?

Yes, whether the directions are by way of Order, Direction, Certificate or letter they must be complied with.

What will happen if I cannot do so?

You should contact the Office and explain your reasons.

Powers of the Controller

What powers do I have?

Your powers are limited to dealing with the Patient’s financial affairs and are clearly defined in the Order appointing you Controller.

Can I deal with the Patient’s capital monies/property not specified in the Order?

No, not without specific authority.

How can I get that authority?

By writing (either personally or through your solicitors) detailing what action you wish to take, explaining your reasons and giving any additional information which might assist in reaching a decision.

Does that mean that I will have to come to the Office each time I apply?

No, most matters can be dealt with by letter.

Are there other times when I will have to ask for specific authority?

Yes, for example when you want to carry out any of the following transactions on the Patient’s behalf:

  • making loans or a gift
  • buying or selling a house
  • granting or giving up leases or tenancies
  • varying any authorised allowances
  • varying the Patient’s investments
  • incurring an overdraft
  • taking or defending legal proceedings
  • entering into a Deed of Covenant

(If in doubt it is always best to ask for our advice).

Do I have to deal with the Patient’s income tax and other tax matters?

Yes. For further details see chapter on Income Tax.

Do I sign documents on the Patient’s behalf?

Yes. It is not possible to provide comprehensive guidelines but as a general rule you can sign forms but for formal legal documents you may need specific authority.

How do I sign?

Usually “(The Patient) acting by (your full name) as Controller”.

Do I have to consult the Patient at any time?

If the Patient is able to express an opinion he or she should be consulted and his or her views made known to the Court, even when they conflict with your own views.

Do I have the power to decide where the Patient should live?

No, as Controller you have no power over the “person” of the Patient; you only control his or her finances.

Can I authorise an operation or medical treatment for the Patient in my capacity as Controller?

No, you can only control the Patient’s finances.

Can I prevent the Patient from making a Will?

No, But see chapter on Statutory Wills.

Can I stop the Patient from getting married?

No, but see chapter on Marriage and divorce of the Patient.

Can I stop the Patient from being visited?

No, not in your capacity as Controller.

When do my powers come to an end?

On the Patient’s recovery or death or if a new Controller is appointed in your place. Each of these events is dealt with in detail further on in this booklet.

Fees

Are there any fees payable?

Yes. The Office is required to cover its operating costs from fees received from Patients’ estates. The scale of fees to be charged is laid down by Parliament.

What are these fees?

The main fees are a commencement fee, which is paid when an application for an appointment of a Controller is made. There is also a fee due when the Controller Order is issued. An annual administration fee is charged each year.

There is a further fee, called a transaction fee, which is charged when an order is made for some special dealings, such as the sale or purchase of property or the execution of a Statutory Will.

What happens if the Patient cannot afford to pay the fee?

In cases of hardship the office will consider applications to remit fees or to waive the fees altogether.

Social Security Benefits

Who is responsible for ensuring that the Patient is receiving all the benefits to which he or she is entitled?

You, as Controller.

Where can I get assistance in obtaining information about the various benefits?

Detailed information on each benefit is obtainable from your local office of the Social Security Agency. The following information may be of use to you as Controller:

  1. if the Patient is entitled to benefit, application for the benefit must be made at the earliest opportunity to the local office of the Social Security Agency, otherwise there may be a loss of benefit, since payment may be back-dated only for a specified period before the date of application and not necessarily to the date when the Patient became eligible for benefit.
  2. if at the time a Controller is appointed, the Patient’s Social Security Benefits are: being received by a hospital and used for providing the Patient with extra comforts; or being received by the Health and Social Care Trust and applied towards charges for accommodation provided for the Patient; such arrangements may continue if the Controller and the Court find this administratively convenient.

Maintenance and care of the Patient

How are the ordinary day to day living expenses of the Patient provided for?

It is usual to authorise a Controller to spend as much as is necessary of the Patient’s income in maintaining the Patient and providing him or her with clothing and extra comforts. Sometimes, more often when the Patient is in a private nursing home or residential accommodation provided by the Health & Social Care Trust, it is also necessary to use capital, and authority to do this must be sought from the Office. The accommodation, care and treatment of the Patient are matters to be decided upon by the near relatives of the Patient in consultation with his or her medical attendant & social services.

It is your duty to ensure that the Patient receives all the Social Security Benefits to which he or she is entitled and it is equally important that the court is advised of any change in the Patient’s accommodation and of its cost.

Are there any matters to remember about the various kinds of accommodation by Patients?

There are basically four kinds of accommodation.

  • National Health Service accommodation
    Many Patients are accommodated in National Health Service hospitals and although they are maintained without charge, Social Security Benefits maybe reduced after the Patient has been in hospital for a period of time.
    The total amount of the Patient’s net income is often very much more than this and it is your duty, within the limits of the Patient’s resources generally, to ensure that all the Patient’s reasonable requirements in the way of “extras” (comforts, clothing, outings, holidays and so forth) are met and it is left to your discretion to make whatever arrangements you consider to be appropriate. Hospital authorities will usually give helpful advice with regard to such arrangements.
  • Private nursing or residential homes
    Where the Patient is in a private nursing or residential home, it is often necessary to resort to the Patient’s capital to meet the charges. Whilst it is your duty to ensure that the fees are regularly paid and the Patient is provided with adequate extra comforts, the Court must be given good notice if any capital will be required to be raised.
  • Residential accommodation provided by the Health & Social Care Trust
    When the Patient enters this type of accommodation it is necessary to disclose his or her resources, so that the local authority may assess the Patient’s liability to contribute towards the costs of maintenance. In making an assessment, the local Trusts will disregard certain items including the statutory amount required for pocket money. You should apply to the Trust, as the capital is gradually reduced, for a fresh assessment of the Patient’s liability until the statutory minimum amount of capital is reached. At this point, the Patient becomes liable only for the minimum charge. You should satisfy yourself that the assessment is correct.
  • Patient living at home
    Sometimes the Patient may either be living in his or her own home or with a member of his or her family, who may not necessarily be the Controller. If the Patient is not living with you, you should ensure that regular payments are made to the person having the care of the Patient to comply with whatever arrangements have been made. Otherwise, you should pay whatever outgoings are necessary in connection with the property occupied by the Patient and also see that he or she is provided with regular sums for maintenance. This can sometimes be done by making arrangements with a local Bank for a sum to be handed over to the Patient on a weekly basis. Obviously Patients should not be allowed to overspend but on the other hand all reasonable requirements, having regard to their means, should be met.

Accommodation and treatment of the Patient

What are the Controller’s responsibilities regarding these matters?

These are matters where Patients’ own wishes, if they are capable of expressing them, must be considered in conjunction with those of their nearest relatives and the advice of their medical attendants. If the Patient is not already in a hospital, nursing or residential home or accommodation provided by The Health and Social Care Trust and it is considered that he or she needs care and treatment of that kind, help and guidance should be obtained from the Patient’s own doctor, or, if this is not practicable, from the Social Services Department.

The Patient’s doctor or the Social Services Department should be consulted whenever you feel in need of advice or any matter connected with the accommodation, care and treatment of the Patient.

Property and land

What must I do in respect of the Patient’s property?

It is your duty to keep the property in a reasonable state of repair and to ensure it is secure.

You will also have to make certain that the building is insured for its full replacement value and, whenever possible, comprehensively covered. Remember that the policy should be taken out in the Patient’s name.

What else should I bear in mind?

Not everything can be covered here but some main points to note are:

  • all reasonable steps should be taken to prevent the Patient from signing any agreements, contracts and documents of that sort in respect of the property. While the Patient’s signature may not be legally valid such action can create difficulties and often embarrassment;
  • if a patients’s house/lands are tenanted & persistent arrears of rent occurs, consider asking for authority to take legal advice. Do not leave the situation to worsen;
  • ensure that all property deeds, certificates and documents are held safely.

Do I need to appoint a managing agent?

When the Patient’s property is tenanted you will usually be authorised by the Court to collect rents and to manage the property yourself. If there are several properties or if it is impractical for you to manage the property an agent may be employed at the usual rate of commission.

Are there any special points to bear in mind if the Patient’s property is to be sold?

When a Patient moves into a nursing home, residential home or hospital the Patient’s doctor should be consulted before any decision to sell the property is made. He or she will be able to advise if there is any likelihood of the Patient returning home and whether or not the sale would have an unduly distressing effect on the Patient;

  • you must obtain the consent of the Court before a sale can take place. You may be given authority to sell a specific property in the first general order;
  • you must instruct a solicitor to act in the sale. Amongst other things, the solicitor will obtain evidence that the property is being sold at the proper market price;
  • it is usual for a solicitor to receive the purchase money;
  • once the property has been sold remember to notify the rating and service authorities and to cancel any insurance on the property, if your solicitor has not done so.

Are there any special points to bear in mind when purchasing a property for the Patient?

You must obtain the consent of the Court before a property can be purchased and you must instruct a solicitor to act in the purchase.

The housing needs of Patients differ according to the nature of the personal disability. You should consider whether the Patient has any special requirements and you might find the advice of the Patient’s doctor helpful in this respect. A structural survey of the property should normally be obtained and in some instances, for example where the Patient has a physical disability, a specialist survey may also be advisable. Such a survey will determine the suitability of the property for the Patient and provide advice as to what will be required to meet the Patient’s specific needs.

Once the contract has been accepted and the completion date is known, ensure that the rating and service authorities are notified and steps are taken immediately to insure the property. The solicitor should help you with this. It is advisable to inform the Social Services of the new address and especially so if the move is to a new area.

Furniture, effects and personal possessions

How do I deal with these?

You must ensure that the Patient’s personal possessions are fully insured. Where practicable, it is often useful to make or obtain an inventory of the contents of the Patient’s home and other personal items. Special note should be made of items of value which may need to be valued and separately insured.

If the Patient’s disability is such that there is a risk in retaining items in his or her home, consideration should be given to disposing of them or placing them in a suitable depository. The Patient’s own views on the matter should be taken into consideration and, if in doubt, the advice of the Patient’s doctor can often be useful.

What if the Patient is moved permanently into hospital or a nursing home or residential home?

In this event the Patient’s possessions may have to be sold. It is, however, advisable in the first place to ascertain from the doctor whether there is any likelihood of the Patient returning home. The Social Services and the hospital or home authorities can also help by advising if the Patient is allowed to keep personal items there, if indeed he or she is capable of appreciating them, and if there are any items of special significance or sentimental attachment. The Court must be consulted before any sale takes place. Whenever the Patient is capable of expressing an opinion regarding his or her possessions, this should be given consideration and as far as is practicable his or her wishes respected.

Can the family help?

Quite often family and friends can assist in indicating items of special family importance or attachment to the Patient. Arrangements can sometimes be made for relatives to hold items on behalf of the Patient subject to their signing a special undertaking.

What about the items the Patient intends to leave under a Will?

This will require your careful consideration and as far as is practicable you should try to respect the Patient’s wishes. Where possible, and with the consent of the Court, arrangements may be made for a potential beneficiary under the Will to hold the items on an undertaking that they are held for safe custody, properly insured, during the Patient’s lifetime. It must not be forgotten, however, that the Patient’s needs come first and the items will have to be sold and the proceeds used for the Patient’s own benefit if sufficient other funds are not available. NB It should be noted that the contents of the Patient’s Will should not be disclosed to anyone without the prior and specific approval of the Court.

The Lord Chief Justice’s Visitors

Who are the Lord Chief Justice’s Visitors?

There are three types of visitors, all appointed by the Lord Chief Justice:

  • Medical Visitors, who are senior consultant psychiatrists and who visit Patients for specific purposes on the directions of the Court;
  • The Legal Visitor, who is a senior qualified legal adviser; and
  • General visitors, who may visit Patients.

Why are general visits arranged?

The purpose of a general visit is normally to advise on the Patient’s circumstances and to see that all the reasonable needs of the Patient are being met. Occasionally, but rarely, the visit may be to ascertain a particular fact. The overall purpose of any visit is to be of benefit to the Patient.

But what if I do not want the Patient to be visited?

You must do nothing to stop or obstruct the Visitor, for he or she is acting on the Court’s directions. You should co-operate with the Visitor, who has the Patient’s interests to consider. If you are worried about any matter relating to the Patient, or concerning your own position, the Visitor would like to know and would be pleased to raise problems with the Court.

Will I be given a copy of the Visitor’s report?

No, the reports are strictly confidential to the Court save in exceptional circumstances.

Driving licences

If the Patient holds a current driving licence, what should I do?

You should notify the Driver and Vehicle Licensing Centre (DVLC) at Coleraine either immediately you are appointed Controller or when you learn that the Patient holds or has applied for either a full or provisional licence.

Does that mean that a Patient cannot hold a current driving licence?

No, controllership proceedings do not automatically revoke a driving licence nor prevent a Patient from obtaining one.

What should I tell DVLC?

Give the name, address, date of birth and sex of the Patient and the name and address of the doctor currently responsible for the care of the Patient. Give your own name and address and the date of the Order appointing you Controller.

What will happen next?

Usually DVLC will arrange (and pay) for a doctor to advise whether or not the Patient is fit to drive. This may mean the Patient being invited to attend an examination by a doctor.

Can the Patient continue to drive in the meantime?

No, the Patient should not drive until DVLC have confirmed that it is in order for the Patient to do so. If you have the licence you should continue to hold it until the Patient is given permission to drive.

If DVLC allow the Patient to drive, should I keep the licence?

No, the Patient should hold the licence because it may have to be produced to the police or other persons, for example in the event of an accident or driving offence.

Is there anything else I should do?

Yes, it is wise to keep a note of the number of the licence in case the original is lost. You should also make a note of the expiry date so that you can remind and help the Patient to renew it.

Wills and trusts

Is the Patient permitted to remain a trustee?

Mental incapacity does not of itself remove a trustee from the trust but as a Patient’s signature is not legally valid, he or she will need to be removed and the correct procedure to achieve this must be followed. You should instruct a solicitor to act in this and advise the Court.

Does the Court need to know if the Patient benefits from another estate?

Yes, the Court needs to know everything in regard to a Patient’s property and financial situation. When a Patient becomes entitled, for example by reason of the death of a relative, to a life interest in an estate, or to a legacy or bequest, or to a share in the residue of an estate, the Court should be notified and supplied with all information available.

If it is known that the Patient has a reversionary interest in an estate, evidence of the continuing life of the present beneficiaries should be sought periodically from the trustees, who should be given written notice of the Controller’s involvement.

What if the Patient wishes to make a Will?

Lack of mental capacity to manage their property and affairs does not automatically debar Patients from making a Will and their wishes in this matter must be respected. Because of the Patient’s incapacity, however, special procedures must be followed and the manner in which the Will is prepared will depend on the extent of the incapacity. The Court will require to see evidence from a doctor as to whether or not the Patient is capable of making and understanding a Will, that is to say whether he or she has “testamentary capacity”.

As soon as preparation of a Will is being considered the Court should be advised and guidance sought. (See also chapter on Statutory Wills).

Are there any points to note in respect of the Patient’s Will?

Wills are very important documents. They reflect the wishes of the Patient and the information contained therein is confidential to the Patient. No information about a Patient’s Will or any Codicils may be disclosed to any other person without the Court’s prior approval. All Wills and Codicils must be held in a safe place, in accordance with the directions of the Court.

Should a Patient’s Will or Codicil come into your possession, extreme care must be taken to ensure that it is not damaged in any way whatsoever. Even a pinhole in a Will can create difficulties on the death of a Patient.

Controller’s accounts

Do I have to prepare accounts of all my receipts and payments as Controller?

Yes, unless you are directed otherwise.

How often do I have to account?

Usually once a year on the anniversary of the First Date of General Order.

Should the accounts be in any particular form?

Your own format, clearly set out, will be accepted.

Do I have to produce supporting vouchers with the account?

Yes, you should send the following with your accounts:

Rent accounts (where Agents are employed for collecting rents).

Copies of Trustees’ accounts where income is collected and distributed by Trustees.

Statements, pass books or bank books (made up to date) relating to any Building Society or Bank accounts in the Patient’s name.

What if I cannot produce all the vouchers?

Receipts can usually be obtained for payments to a hospital or nursing home, for pocket money and extra comforts, but it is realised that it is not practicable to produce receipts for extra comforts such as cigarettes, tobacco and confectionery, which you have supplied direct and you will not normally be expected to account for such items in detail. It is recommended that a small account book be used to record details of such expenditure.

Are there any exceptions for special circumstances?

Yes, where the Patient is living at home with his family, detailed accounts of expenditure on household expenses are not usually expected, provided the Court is satisfied that the Patient is enjoying proper care and attention. If the Patient is the owner of the house, the receipts for payments for rates, insurance premiums, repairs and any mortgage repayments should be obtained and produced. In cases where a large establishment is maintained, more detailed information on household expenditure may be required, for example, books of account showing the wages and salaries paid to staff and the payments made in settlement of tradesmen’s accounts. All available vouchers for the entries in the account books should be produced if required.

Can I claim out-of-pocket expenses?

Yes, reasonable out-of-pocket expenses, including postage, may be charged.

What happens if I fail to account?

You run the risk of being discharged and replaced. Any evidence of misappropriation of Patient’s funds will be referred to the appropriate authority.

In such circumstances consideration will be given to calling in the Security Bond.

Change of address

Should I tell the Court if the Patient moves?

Yes, any change of address should be reported without delay, even if the Patient simply moves from one nursing home to another within the same ownership.

Do I need approval to the Patient being moved?

The question of accommodation is a matter to be dealt with by the Patient’s family and medical advisers. In some cases, for example, where it is intended to move a Patient from hospital into a nursing home, you as Controller should be consulted as you may need further direction from the Court to make arrangements to discharge fees.

Should I tell anyone else?

Yes, you must tell the Social Security Agency in case the move brings about a variation in the rates of benefit to which the Patient is entitled.

What if I move?

Tell the Court, because a record has to be kept of your address.

Marriage or divorce of the Patient

Should I report the Patient’s intended marriage?

Yes, as soon as possible, because it may well affect the Patient’s financial position.

Will the Patient need the Court’s approval to get married?

The Court cannot prevent the Patient from getting married and therefore approval as such is not required. It is the Registrar of Marriages that has to be satisfied that the Patient understands the implications of the marriage contract.

What if the Patient gets married without telling me?

Let the Court know immediately. You will be given guidance on any action that is required.

Does the marriage end the Controllership?

No, generally speaking the Controllership will only end when the Patient recovers or dies. However, you may (in some cases) wish the Patient’s new spouse to become Controller in your place (see chapter on Changing Controllers).

What if the Patient wishes to change his or her Will to provide for the new spouse?

Marriage will usually revoke any existing Will and this aspect will be given consideration as soon as there is any indication that the Patient intends to marry or has married. You will be given guidance as to the action required.

Will the Court need to know of a Patient’s divorce?

Yes, normally directions will already have been given in connection with the divorce proceedings or the financial consequences of the divorce but if not, you should let the court know as soon as you can. The effects of the divorce on the Patient’s financial affairs and his or her Will will be considered and you will be given guidance as to the action required.

Income tax

Who is responsible for the Patient’s tax affairs?

You, as Controller.

What documents should I retain for this purpose?

Any documents connected with the Patient’s income and investments. These include:

Statements and Dividend Vouchers received with interest and dividends from those undertakings and companies with which the Patient has investments or from which the Patient receives a pension.

Contract Notes received from a stockbroker on the sale or purchase of an investment.

How can I obtain details of tax paid for those investments held on an accumulating fund in Court?

By application in writing to Court Funds Office

Laganside House
23 - 27 Oxford Street
Belfast
BT1 3LA

Telephone (028) 9072 8895
Fax (028) 90728942
Email courtfundsoffice@courtsni.gov.uk

Can I engage professional assistance?

Yes, any fees may be paid from funds under your control, subject to you receiving approval from the Court.

Investments

Should I register my appointment as Controller with those companies or undertakings in which the Patient has invested?

Yes. This includes Building Society and bank accounts. It also includes those companies in which the Patient has a shareholding. Failure to register your appointment may delay settlement of transactions through the Stock Exchange.

Do I have to use the services of a particular stockbroker?

No, if the Patient has used a stockbroker prior to his or her financial affairs being administered by the Court then by all means seek their advice, or if you prefer, contact a different stockbroker.

If I choose to consult stockbrokers, what information should I give them?

A copy of the Order appointing you as Controller and any direction of the Court about investment;

the Patient’s estimated annual expenditure and present annual income, which should include all state benefits and occupational pensions (saying whether net or gross);

details of the Patient’s capital assets including acquisition costs and dates; this information will be needed for capital gains tax purposes; and the Patients age, physical health and prospects of life.

How should their advice be implemented?

The Broker’s report, together with any comments you wish to make, should be sent, without delay, to the court for approval. On approval, a sealed Authority will be prepared detailing the proposals and authorising any release of cash for investment. The Court should also be sent a copy of the client agreement letter which will be issued by the stockbroker.

What should I do with the contract notes?

Please forward copies to the Court and retain the originals.

How should I deal with company literature sent to me as Controller?

No action need be taken on receipt of company reports and accounts and you are not normally required to vote on any interim and end of year resolutions, for example, for appointment of directors. You will receive all notices relating to the Patient’s investments. Such notices may include offers of allotment, bonus issues, offers of purchase (including takeover bids), liquidations, capital reorganisation, mergers and so on. Copies of the relevant parts of these documents should be sent to the Court without delay and should be accompanied by your proposals (if any). If acceptance of any offer requires a payment from the Patient’s estate, you should say, at the same time, whether there is sufficient surplus in the Patient’s Funds to meet the payment or whether it is proposed that the payment should be made from the Patient’s capital.

How should I deal with any surplus income which I have received on behalf of the Patient?

You may lodge the income in an interest earning account held in the name of the Patient. Alternatively you may request that proposals for a more permanent form of investment be made. If a form of investment management has been entered into, the fund manager should be contacted directly.

What should I do if offered dividends in the form of shares rather than cash?

In normal circumstances it is recommended that you take dividends in the form of cash rather than additional shares. The advantage to a company of the scheme is obvious but there is no income tax advantage to the shareholder (the Patient) and, if you do decide to receive the additional shares, difficulties may arise on future portfolio valuations.

If the Court directs that the Patient’s assets be lodged in Court what action should I take?

A letter of explanation and relevant forms will be sent to you from the Court Funds Office giving advice on how to lodge funds and transfer investments into Court.

Care should be taken to ensure that there is no loss of interest to the Patient if there is a requirement to give notice of withdrawal, for example a “90 day account”. The Court Funds Office should be advised of any anticipated delay.

How will the funds be dealt with by the Court?

Investments held in court are registered in the name of the Accountant General of the Court of Judicature and credited to the Patient’s account. Having taken advice, the Court will direct how the funds are to be invested, taking into consideration the age of the Patient, the present annual income, the anticipated annual expenditure, the capital assets and any particular needs of the Patient or his dependants.

How will the funds be invested?

Some of the fund may be invested in government stocks (gilts) and/or company shares (equities). A portion of the fund will always be maintained as a cash deposit to cover any short term spending requirements or unexpected needs. The different types of investments are explained in more detail below:

Government stocks (gilts)

Gilts are regarded as very low risk investments, with a guaranteed return. Fixed interest gilts will not provide any capital growth, meaning the value of the gilt will not increase but as they are backed by the government, they are viewed as very secure. Interest is paid on the amount of money invested and is lodged into the deposit account.

Company shares (equities)

Investments in equities have the potential to produce high returns over a period of time, but also carry greater risks as the value of the investment can decrease as well as increase. Investing in equities aims to achieve long term capital growth (an increase in the value of the initial award) for the Patient as well as entitling them to income in the form of share dividends. Any dividends received are lodged into the deposit account.

Stocks and shares are held by our contracted stockbroker in electronic form. This means that there is no need for us to hold physical share certificates.

Where are the cash deposits held?

The Court Funds Office is required by law to lodge cash deposits with the UK Debt Management Office (DMO), which is a government agency. Therefore it is not possible to invest cash deposits with any other institutions, such as high street banks. However, all cash deposits lodged with DMO are guaranteed by HM Treasury.

What is the rate of interest on the cash deposits?

The rate of interest applied to cash deposits is set by the Lord Chancellor and is subject to regular review. Interest is credited to the Patient’s funds at the end of November each year without deduction of tax. Details of the current interest rate can be found on the Northern Ireland Courts and Tribunals Service website at www.courtsni.gov.uk.

Are the funds safe?

As stated above, the funds held as cash deposits are fully guaranteed by HM Treasury. However, funds invested in gilts and equities are not guaranteed. Funds invested in gilts are not fully guaranteed, but as they are backed by the government, they are viewed as safe investments.

Any funds invested in equities will be subject to fluctuations in value. However, investments will only be made in equities to achieve long term gains (greater than five years). Therefore you should not be alarmed if the value of the fund does fall when measured over a shorter period of time.

How are the services of the stockbroker paid for?

A management fee is charged by the stockbroker in respect of each fund that holds investments in gilts or equities. The fees are based on a percentage of the funds held and are deducted from each individual’s funds on a quarterly basis.

Also, each time the stockbroker carries out a sale or purchase of an equity or gilt, there are transaction charges. These charges are either deducted from the sales proceeds or included within the purchase costs, so you will not see a direct charge being made to the Patient’s funds.

How are the payments out made?

The Court Funds Office will transfer funds into the Patient’s bank account direct (BACS) and you will be asked to provide the account number and sort code.

Statutory Wills

What is a Statutory Will?

A Statutory Will is a Will which is executed under an Order of the Court on the behalf of a Patient, if medical evidence shows that the Patient does not have testamentary capacity (see chapter on Wills and trusts).

How do I apply for a Statutory Will?

You should start by seeking advice from a solicitor, because the application to the Court requires the preparation of legal documents. There will usually be a hearing before the Court which requires the attendance of a solicitor to represent the Controller.

Recovery of the patient

What should I do if the Patient becomes capable of managing his or her own affairs?

In the first instance, either you or the Patient should obtain medical evidence stating that the Patient is now capable of looking after his or her own finances. This evidence should be sent to the Court. It will then be necessary for an application to be made by the Patient for an order restoring the Patient to the management of his or her own affairs.

How long will it take?

The procedure can be very quick, once all the information has been received. A date for considering the application can often be given within a week, and it may be necessary for you to attend the Court. The Order will be sent to the Patient shortly after it is made. You may be required to submit a final account before you are discharged.

Changing Controllers

What do I have to do if I wish to retire from the Controllership?

You should write stating your reasons and, if possible, providing the name and address of someone else who is willing to take on your duties.

When will my duties cease?

It will be necessary for an Order appointing a new Controller to be made and issued and for your final account to be dealt with before your duties cease.

Can I nominate someone to succeed me on my death?

You may recommend someone to take over your duties but the question of who will be appointed remains a decision for the Court, who will, however, give consideration to your wishes.

Death of a Patient

What happens when the Patient dies?

Your powers as the Controller are at an end. There are, however, still things that need to be done. The Patient’s estate now falls to be dealt with by his or her personal representatives and this includes payment of funeral expenses. You must notify the Court that the Patient has died, giving the date of death, as soon as possible; you will then be told by letter what else needs to be done.

Who are the personal representatives?

Personal representatives are the persons entitled to take out a Grant of Representation to the Patient’s estate. If the Patient has left a Will, they will usually be those people whom the Patient has appointed as Executors or Trustees of the Will. They will need to apply to the Probate Office to prove that Will. In due course they will be given a Grant of Probate.

If the Patient has not left a Will the personal representatives will normally be those people entitled to share in the Patient’s estate, that is to say, his closest relatives. They must apply also to the Probate office and will in due course be supplied with a Grant of Letters of Administration. Each of these documents is known by the general term Grant of Representation.

For further details and advice contact:

The Probate Office
Royal Courts of Justice
Chichester Street
Belfast
BT1 3JF

Telephone (028) 9032 8594

What happens if there is no Will and no family?

The Patient’s estate may be claimed by the Crown and the Crown Solicitor will take whatever action is necessary. The Court will acquaint him with the situation once it is known that he must be involved.

Where can I get advice about dealing with the deceased’s estate?

If you are the personal representative you can apply direct to the Probate Office in the High Court, where you will be given assistance to take out a Grant. You may instead ask solicitors to deal with the matter for you. Your local Citizen’s Advice Bureau will also be able to advise.

If you are not the personal representative it will be helpful if you ensure that the personal representative or solicitors are made aware that the Patient has died and that he or she was a Patient under the Court’s control.

What happens after the Grant has been taken out?

It must be produced by the personal representatives to the Court so the final directions may be given.

Is a Grant of some sort always necessary?

It may be possible to administer a Patient’s estate without a Grant, if the total net assets are worth less than £10,000. Some organisations require to see a Grant as proof of authority before they will release any funds. The Court may be able to release small cash funds, although other proofs may be called for. However, if a Grant is taken out, the Court needs to see it.

What are final directions?

These are the directions which need to be given by the Court so that you may be formally discharged as the Controller and the question of your final account decided.

Do I have to render a final account?

Yes, unless the Court directs otherwise.

What if I am the sole beneficiary?

Then, the question of checking your final account may not arise.

What other directions are necessary?

If the Patient has a fund in court, directions need to be given to pay this to the personal representatives or beneficiaries.

If the Patient’s documents (such as deeds or stock and share certificates) were directed to be held during the Patient’s lifetime by a bank for safe custody, then on the Patient’s death the bank should release them to the personal representatives without further direction from the Court.

Is any further fee payable?

The fees payable to the Court on death are an Annual Administration Fee due up to the termination of proceedings and a winding up fee. Any other fees already outstanding will be collected in due course from the personal representatives.

The purpose of this booklet is to offer some guidance to Controllers appointed by the Court and those who are considering taking on such responsibility.

Further Information available from:

The Office of Care and Protection
1st Floor
Royal Courts of Justice
Chichester Street
Belfast
BT1 3JF

Telephone (028) 90724729/90724730
Fax (028) 9072 5939
Email: ocp@courtsni.gov.uk

Useful Telephone Numbers:-

Premises Branch (028) 9054 9393
Pension Credit Freephone 0808 100 6165
Disability Living Allowance (028) 9090 6182
Alzheimers Society (028) 9066 4100
Citizens Advice Bureau (028) 9023 1120
Age NI (028) 9024 5729
Headway (028) 9020 5777