Summary: Mr X complained on behalf of his late friend, Mr Y. He said the Council, when acting as Deputy, did not act in Mr Y’s best interests when it decided to cancel his life insurance policies. We have found no fault with the Council’s actions

The complaint

1. Mr X complained on behalf of his late friend, Mr Y. Mr X is executor of Mr Y’s estate.
2. Mr X complained about the Council’s management of Mr Y’s financial affairs after it was appointed Deputy. Mr X said the Council cancelled Mr Y’s three life insurance policies against Mr Y’s stated wishes. Mr X said the Deputyship team failed to act in Mr Y’s best interests by cancelling the policies.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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What I have and have not investigated

5. The complaint relates to the Council’s cancellation of Mr Y’s life insurance policies in 2019. However, Mr X was not aware of this until March 2023 after Mr Y had died. I have therefore investigated the Council’s actions dating back to 2019.

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How I considered this complaint

6. I have considered Mr X’s complaint and have spoken to him about it.
7. I have also considered the Council’s response to Mr X and to my enquiries.
8. Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Deputyship

9. The Mental Capacity Act 2005 is the framework for acting and deciding for people who lack the mental capacity to make particular decisions for themselves. The Act (and the Code of Practice 2007) describes the steps a person should take when dealing with someone who may lack capacity to make decisions for themselves. It describes when to assess a person’s capacity to make a decision, how to do this, and how to make a decision on behalf of somebody who cannot do so.
10. The Court of Protection deals with decision-making for adults who may lack capacity to make specific decisions for themselves. The Court of Protection may need to become involved in difficult cases or cases where there is disagreement which cannot be resolved in any other way. The Court of Protection:
• decides whether a person has capacity to make a particular decision for themselves;
• makes declarations, decisions or orders on financial or welfare matters affecting people who lack capacity to make such decisions;
• appoints deputies to make decisions for people lacking capacity to make those decisions;
• decides whether a Lasting Power of Attorney or Enduring Power of Attorney is valid; and
• removes deputies or attorneys who fail to carry out their duties.
11. If there is a need for continuing decision-making powers and there is no relevant Enduring Power of Attorney or Lasting Power of Attorney, the Court of Protection may appoint a deputy to make decisions for a person. It will also say what decisions the deputy has the authority to make on the person’s behalf. The Office of the Public Guardian (OPG) oversees the work of attorneys and court-appointed deputies and produces detailed guidance for them.
12. The OPG requires deputies to obtain independent financial advice before making decisions on a person’s behalf.

What happened

Background

13. In 2019, the Court of Protection appointed the Council as Deputy for Mr Y to manage his property and financial affairs as he lacked capacity.
14. The Council sought independent financial advice regarding Mr Y’s finances. This included the matter of Mr Y’s 3 life insurance policies.
15. The advisor said that Mr Y would need to pay for the policies from his personal allowance as the rest of his money would be spent of care fees. They said that given the policies would only payout upon Mr Y’s death, he would be better served by cancelling the policies. This way, he would benefit from the money that would have been spent on the policies rather than others benefiting after his death.
16. The Council considered the advice and calculated the costs and savings of keeping or cancelling the policies. In September 2019, the Council cancelled Mr Y’s life insurance policies.
17. In March 2022, Mr Y received a large inheritance.

After Mr Y’s death

18. Mr Y sadly passed away in March 2023. Mr X gave Mr Y’s funeral bill to the Deputyship team. He also informed the Council that he was aware of a life insurance policy that Mr Y wanted to be used to pay for the funeral costs. The Council paid the funeral costs out of Mr Y’s Deputyship account.
19. Mr X contacted the life insurance company who informed him that the Deputyship team had cancelled the policies in 2019. Mr X complained to the Council. He said the Council’s cancellation of the policies was against Mr Y’s wishes and the Council had not acted in Mr Y’s best interests.
20. Mr X said that Mr Y specifically wanted the insurance payout to pay for his funeral costs and he had put this in writing. Mr X said that there was only enough money in Mr Y’s account to pay for his funeral due to the inheritance he had received a year earlier.
21. The Council responded and explained it had taken independent financial advice upon being appointed Deputy. The Council said based on this advice, it decided that Mr Y would be better off to focus on his own needs and have the money available for him to use rather than use the majority of his personal allowance to pay for the policies. It also said that the Council had calculated that Mr Y would still have enough cash reserves available after his death to pay for funeral expenses.

My findings

22. As required by the OPG, the Council sought financial advice upon becoming deputy for Mr Y. The Council considered this advice and carried out calculations before reaching its decision to cancel Mr Y’s 3 life insurance policies.
23. As part of its calculations in 2019, the Council confirmed that Mr Y would have enough in his Deputyship account to pay for his funeral costs. This was 2.5 years before he received the inheritance.
24. The financial advice, and ultimately the Council’s reason for cancelling the policies was that Mr Y would be better off using his personal allowance for himself rather than paying into the insurance policies.
25. The Council said it complied with the Mental Capacity Act 2005 and that where possible it took into account Mr Y’s wishes and feelings when making decisions on his behalf. The Council said it did not have any evidence in writing expressing Mr Y’s wishes that the insurance policies should remain in place.
26. Mr Y provided me with a handwritten letter from Mr Y to the insurance company dated 2013. This stated that in the event of his death, he would like the money to be sent to the person making his funeral arrangements. The Council was unaware of this letter when it made its decision in 2019.
27. The Council considered all the information available at the time and it acted in Mr Y’s best interests. I have found no fault with how the Council handled Mr Y’s financial affairs.

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Final decision

28. I have completed my investigation. I have found no fault with how the Council handled Mr Y’s financial affairs.

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Investigator's decision on behalf of the Ombudsman