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How can I help my adult child manage their finances?

There are many parents across the country whose children suffer from a birth or acquired disability, such as a brain injury or learning difficulties. As they grow older, these children continue to require support to help them to be independent.

When you have been the supportive parent of a differently abled child who is not able to make decisions  about their finances, you can suddenly find that once they turn 18, you cannot continue to manage their finances for them as you did previously.

Dependent on your child, it may be that although they do not have the capacity to manage their finances on their own, they can manage them with the right support. 

If your child does not have the mental capacity to manage their finances, because they do not understand the implications and effects of the financial decisions, someone may need to be appointed to help them.

The role of the person appointed depends on both your child’s assets and their mental capacity.

If your child has finances that need managing, for example an inheritance, savings over £6,000, a share or interest in a property or owning a property outright, or if they have received compensation monies which need managing then somebody will need to be appointed to manage their finances for them.

If they do not have any of the above and it is just their benefits that need managing, a family member or friend can apply to be an appointee for their benefits. The Department for Work and Pensions (DWP) pays the benefits to the appointee to be used for the adult child’s living expenses. 

Just because someone does not have the capacity to manage their finances this does not automatically mean that they do not have the capacity to understand and make a Lasting Power of Attorney. This is a document which allows them to appoint someone they trust who can help them manage their finances.

However, if your child has not got this capacity to make a Lasting Power of Attorney and has financial assets or savings which need to be managed then they will need to have a Deputy appointed. This could be a family member, or a professional Deputy if there are substantial sums of money to be managed.   

The Deputy or Attorney must always consult with the person that they are appointed to act for (known as the Protected Party). The Deputy or Attorney must go through a decision making process under the Mental Capacity Act in order to ensure that they are seeking to involve the Protected Party in decisions or, if they are not able to involve them, the decision the Deputy or Attorney makes are in the best interests of the person they are acting for. Additionally the Deputy/Attorney and their relatives and friends should not benefit from their appointment.

If the adult child that you are appointed to act as Deputy or Attorney for has got care needs, careful thought must be taken into how those are paid for going forward. In certain circumstances you may need to apply to the Court of Protection so that care payments can be approved.  In looking at the request for payment, the Court will consider the child’s financial situation to ensure that there is more than sufficient money to meet the cost of this care.

For information about making Lasting Powers of Attorney and the role of an Attorney please visit our Attorney pages.

https://www.brethertons.co.uk/site/individuals/wills-trust-probate-solicitors/powers-of-attorney/

For more information about being a Deputy and applications to the Court of Protection please visit our Court of Protection pages.

https://www.brethertons.co.uk/site/individuals/wills-trust-probate-solicitors/court-of-protection/

For advice on this issue please contact our Court of Protection specialist, Veronica Male, on 01788 557 574 or by email on veronicamale@brethertons.co.uk.