Top tips for managing finances as an attorney or deputy

What is a Power of Attorney?

A Power of Attorney is a legal document which allows a person (known as the donor) to authorise chosen people, known as attorneys, to act on their behalf. The most commonly used Powers of Attorney are the Property and Financial Affairs and the Health and Welfare Lasting Powers of Attorney.

What is a Deputyship?

In the event a person did not have the requisite mental capacity to make a Lasting Power of Attorney, then a Deputyship Application would need to be pursed. A Deputyship allows the Court to appoint individuals on behalf of the incapacitated person to make decisions on someone’s behalf and manage their affairs. The application is a time consuming and expensive process.

There are certain procedures and best practises to follow when managing the financial side of an attorneyship or deputyship, ensuring you comply with regulations and to avoid unforeseen future issues.

The importance of accurate record keeping

Firstly, it’s important to maintain complete and accurate records. The best way to do this is to keep a monthly reconciliation using the bank statements received monthly, immediately highlighting any discrepancies occurring on the bank statement and thus, rectifying matters in a timely manner.

Secondly, constant reappraisal of the statements can allow you to determine where funds can be spent in a more effective way for the donor.

Access to accounts

Next, ensure you have online access to all accounts. This allows you to get direct and up to date access to the accounts both in terms of being able to review the statements and in order to make payments in a timelier manner.

The online accounts we use have a two-level verification process when sending funds out and thus, mitigates payment errors.

Check your cheques

When you need to produce cheques to pay for goods or services, always make sure to complete the cheque stub with clear and accurate information. A cheque number will only appear on bank statements and therefore, the completed cheque stub will allow you to swiftly identify the payment for reconciliation.

Additionally, ensure you use cheques in order as this can highlight an issue such as a cheque not being banked within a reasonable time.

For example, if you see cheque 120 paid in and cheque 101 has not yet appeared on the statement, then it may be worth contacting the payee to ensure they have received the cheque. If it has not been received, or if it’s over 6 months since the cheque was signed, then a new cheque will be needed. In this situation, it is important to note on the cheque stub that the particular cheque has been voided to avoid the inference that the same person has been paid twice.

It is advisable to send a cheque for a large amount by recorded delivery so to have the confidence that the cheque has arrived safely.

Paying an invoice

When paying an invoice, keep the invoice in paper form or electronically so that when you reconcile the bank account you have clear records showing what has been paid. This can also help when you have a disagreement with a supplier or firm over what has been paid.

Ensure you review an invoice thoroughly, seeking clarify on any invoice you are unsure about before making payment.

One of the golden rules when dealing with funds as a deputy or an attorney is always keep the funds separate from your own and never mix or operate funds from the same account. It may seem more straightforward to use the same account, but confusion can occur relatively easily and can be difficult and time consuming to correct. Regarding a deputy appointment, the deputy needs to produce an OPG102 form each year outlining where funds have been received and spent. If funds are mixed, then this process will be a lot more time consuming and can result in errors being made.

How Moore Barlow can help

If you require assistance in this area, please contact our expert team today.