Where concerns were raised when Trust Corporations apply as a Deputy for the Financial and Property affairs of a Protected Party.
A judgment was issued whereby the courts raised their concerns when considering an application that had been made to appoint a Trust Corporation as a Deputy, for the financial and property affairs of a Protected Party. Judge Hilder informed of the details required for the Court to be satisfied that the corporation is a fit and proper legal person to hold such appointment.
The case involved 36 applicants covering 11 different trust corporations, all of which are connected to solicitor practices.
The proposed Deputy (the Trust Corporation) is a Trust Corporation within the meaning of section 64(1) of the Mental Capacity Act 2005 and can lawfully act as such; and the Trust Corporation will inform the Office of the Public Guardian (OPG) immediately if that ceases to be the case.
The Trust Corporation will comply with the OPG’s published standards for professional deputies.
(i) The Trust Corporation is authorised by the SRA;
(ii) all the directors of the Trust Corporation are solicitors and it employs no one (save to the extent that it employs a company secretary); and
(iii) the Trust Corporation will retain its associated legal practice to carry out all practical work in relation to the management of the incapacitated person’s property and affairs; and
(iv) the Trust Corporation is covered by the professional indemnity insurance policy of its associated authorised legal practice on the same terms as that practice;
The Trust Corporation will notify the OPG immediately, if there is any change to any of the matters set out in paragraph 3 above.
The Trust Corporation must also ensure that it obtains and maintains insurance cover..
The Trust Corporation will lodge a copy of the insurance policy with the OPG on appointment and will inform the OPG immediately if there is any reduction in the terms or level of the insurance cover.
The note offered some explanations as to why a law firm might chose to create a Trust Corporation, these include:
- “A Trust Corporation is designed to increase flexibility and improve services for clients. By creating a Trust Corporation, you can streamline the administration of estates and trusts to provide greater flexibility in the day-to-day administration of the files that it handles.”
From the Protected Party’s perspective, the benefits of appointing a Trust Corporation include:
1. Continuity – new trustees are never needed as a Trust Corporation never dies, goes on holiday, gets ill or retires. This can create substantial savings in professional fees: each time an individual trustee retires and a new trustee appointed, a deed needs to be created and the assets of the trust have to be transferred, whereas with a Trust Corporation, the appointment and retirement of directors will not affect the assets within particular trusts.
2. Availability – individual trustees aren’t always available due to holidays and other commitments, but a Trust Corporation will always be available.
3. Professionalism – Trust Corporation signatories will be senior members of the private client department of the firm who deal with trusts and estates every day.”
These identified benefits are procedural or financial. Whilst these are important, they are not the only aspects to consider. It was explained in the judgment that “each case will be different but Deputyships generally also require an appropriate person-to-person interaction with the protected person and often their family. Considered from that perspective, it can be seen that the benefit of continuity accrues also to the law firm – a client is retained for the long term, even if the individuals familiar with the case change firms.”
A Trust Corporation can apply to be on the Office of the Public Guardian’s panel of deputies, but there is no ‘panel’ of Trust Corporations which have demonstrated compliance with legal requirements to act. Information necessary to satisfy the Court as to suitability must therefore be ’built into’ the application process itself.”
If you have any queries, please do not hesitate to contact Georgia Clarke (georgia.clarke@) or the team at COPCosts@ .