22 September 2015

The Office of the Public Guardian has recently announced a new structure including a dedicated guardianship team. The changes are to initiate early contact between the Office and a proposed guardian to ensure the proposed guardian understands the responsibilities of the role he or she will be undertaking.

Who is the Office of the Public Guardian?

The Office of the Public Guardian is the body in Scotland responsible for supervising individuals appointed to look after the property or financial affairs of adults who lack the capacity to do so themselves.

What is a guardianship order?

A guardianship order is a court order which appoints a person to act on behalf of such an adult. It can deal with property and financial issues, welfare issues or both. The person appointed is called a guardian.

Is it complicated to set up?

It can be. An application is made to court to have a guardian appointed. That application is normally very detailed and must be accompanied by at least three reports, including two medical reports and sometimes other documents too. The court papers are intimated on all interested parties (e.g. other relatives) and a date for a hearing is set. The guardianship order can be granted at that hearing but sometimes it may be necessary to return for a second or third hearing.

Is it expensive?

Yes, normally it is. Legal aid can be available if there is a welfare component but this is not always appropriate. Including outlays for medical reports and court fees, legal fees can run into thousands of pounds. Fees are normally paid by the adult for whose benefit the guardianship order is granted.

Are there ongoing costs?

Yes, an insurance product called a bond of caution must normally be purchased, to protect the finances of the adult. This is normally based on the value of the adult’s assets and can run into hundreds or even thousands of pounds a year. An annual fee is also payable to the Office of the Public Guardian for auditing the annual account.

Does a guardianship order last for the life of the adult concerned?

The sheriff can grant the order for the duration of the adult’s life but he or she must be satisfied that the adult’s health will not change and that the adult will not be prejudiced by the guardianship order not being subject to review. In younger adults it is more likely that an order will only be made for 3 or 5 years, meaning the guardianship order has to be renewed on a frequent basis through a similar process and at a similar expense as the initial order.

Can another relative object to a guardianship order?

Yes, and this is when guardianship applications can get very messy and cause arguments within families. It is possible for another relative to lodge a competing application and in this situation the sheriff has to try and make a decision about who would be the most appropriate guardian. Sometimes where the position cannot be resolved families agree to have an independent professional person appointed.

Can I avoid my family having to do this in the future if I am not able to look after my own affairs?

Yes, and it is very quick and straight forward to do so. All you need to do is grant a power of attorney. The person or persons you appoint to act for you is called an attorney.

What are the advantages of a power of attorney over guardianship?

There are many. These are some of them:-

• You choose who you want to act for you rather than your family choosing (and potentially having an argument over it).
• There are no continuing insurance costs or supervisory costs.
• There is no requirement to submit an annual account detailing the guardian’s intromissions with the adult’s finances (although an attorney should still keep their own records).
• A power of attorney is much cheaper and much quicker to set up than a guardianship order.
• A power of attorney can have many wide ranging powers that you wish to give your Attorney (including tax planning powers) whereas a guardianship order can only have the powers that a sheriff considers it appropriate that the guardian have.
• A power of attorney lasts indefinitely whereas a guardianship order may have to be renewed on a frequent basis.

What types of power of attorney are there?

As with a guardianship order, a power of attorney can deal with both financial and property issues and welfare issues.

Should I wait until I think I might need a power of attorney?

No, it might be too late by then. A power of attorney must be accompanied by a certificate signed by a solicitor or a doctor at the same time as the granter signs it. The certificate states that the granter understood the nature and extent of the power of attorney at the time of signature.

I am young and fit. Surely I don’t need a power of attorney?

Hopefully not, but you might, and it is far easier for your relatives to use a power of attorney you have already set up than go through the guardianship process. If you don’t want a power of attorney to come into effect as soon as you sign it then you can delay it by inserting a “springing clause” so that it only comes into effect if you become incapable of managing your affairs (certified by two doctors) or you decide you would like your attorney to start acting for you.

How do I go about setting up a power of attorney?

Contact the BTO Private Client team. An initial meeting will be arranged to take instructions and a draft power of attorney will be sent to you to look over. If you are happy with the content a second meeting will be arranged for you to sign the power of attorney. Once your proposed attorneys have signed consent forms agreeing to act for you the power of attorney is registered with the Office of the Public Guardian. A registered extract of your power of attorney is issued and this can be stored by BTO until such time as you may need to use it.

Contact: Ross Brown, Partner rbr@bto.co.uk T. 0141 221 8012