Summary: Mrs X complained the Council held money belonging to her late husband without informing her. We find the Council at fault for failing to clearly inform Mrs X, as executor, about the funds it held and for not following the correct order of priority by failing to consider funeral expenses first. However, after Mrs X provided evidence of the funeral costs, the Council reimbursed these in full. We are therefore satisfied there is no remaining injustice. The Council has agreed to review and update its procedures for managing finances where it acts as deputy.

The complaint

1. Mrs X complains the Council held money belonging to her late husband, Mr X without informing her.
2. She says that because she did not have access to all of his assets at the time of his death, she had to take out a loan to pay for his funeral. Mrs X believes she would not have needed to borrow money if the Council had told her about the funds it was holding.

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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(1), as amended)

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How I considered this complaint

5. I considered evidence provided by Mrs X and the Council as well as relevant law, policy and guidance.
6. Mrs X and the Council had an opportunity to comment on my draft decision. I considered any comments before making a final decision.

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What I found

Relevant legislation

Court of Protection

7. The Court of Protection deals with decision-making for adults who may lack capacity to make specific decisions for themselves.
8. 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 (LPA) or Enduring Power of Attorney (EPA) is valid; and
• removes deputies or attorneys who fail to carry out their duties.

Court-appointed Deputies

9. If there is a need for continuing decision-making powers and there is no relevant EPA or LPA, 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.

Charging for permanent residential care

10. The Care Act 2014 (section 14 and 17) provides a legal framework for charging for care and support. It enables a council to decide whether to charge a person when it is arranging to meet their care and support needs, or a carer’s support needs. The charging rules for residential care are set out in the Care and Support (Charging and Assessment of Resources) Regulations 2014 and councils should have regard to the Care and Support Statutory Guidance.
11. When the Council arranges a care home placement, it must follow the regulations when undertaking a financial assessment to decide how much a person must pay towards the cost of their residential care.

Order of paying debts after death

12. When a person dies, their debts must be settled from their estate in a prescribed order of priority where the total debts exceed the available assets. The order is as follows:
• Secured creditors
• Reasonable funeral, administration and testamentary expenses.
• Preferred and preferential debts
• Unsecured creditors
• Interest on unsecured loans
• Deferred debt, such as informal loan between family members.
13. Where there are insufficient funds to repay all unsecured creditors in full, the available funds should be distributed on a pro rata basis. This means each creditor receives a proportionate share of the remaining estate, with larger debts receiving a correspondingly larger share.

What happened

Background information

14. In 2022, the Council arranged a temporary care home placement for Mr Y. This placement later became permanent. Mrs X managed Mr Y’s finances at that time and was responsible for paying his assessed contribution towards the cost of his care.
15. Mrs X did not pay Mr Y’s care charges, resulting in an outstanding balance of approximately £30,000. In 2024, the Court of Protection appointed the Council as interim deputy for Mr Y’s financial affairs. The Council then managed Mr Y’s income, from which it paid his ongoing care costs, a personal allowance, and 50% of his occupational pension to Mrs X. It also retained a small surplus to meet any additional needs.

Mrs X’s complaint

16. Mr Y died in April 2025. At that time, the Council held approximately £4,000 of his unspent income and personal allowance.
17. In May, the Council wrote to Mrs X in her capacity as executor of Mr Y’s estate. It issued a final invoice for the outstanding care charges accrued before it became deputy. The Council offset the £4,000 it held against this debt.
18. Mrs X responded confirming her role as executor. She explained there were no savings or life insurance and asked the Council to write off the remaining debt. The Council did not respond.
19. In July, Mrs X provided evidence of the funeral costs she had paid. The Council agreed to reimburse these costs. Mrs X also asked what would happen to the remaining funds held by the Council. The Council explained it could either return the funds to her to settle debts or apply them to the outstanding care charges. Mrs X asked for the funds to be paid to her to settle other debts.
20. The Council asked Mrs X to provide details of any additional debts, noting that as deputy it would normally have been aware of these.
21. Mrs X then made a formal complaint. She said the May 2025 letter caused her distress. She explained she had applied to the Department for Work and Pensions (DWP) for funeral support, but this was refused because the Council held funds she had not known about. She again requested payment of the funds.
22. Later that month, the Council reimbursed Mrs X for the funeral costs. It also asked for details of other debts and how she intended to settle the outstanding balance owed to the Council.
23. In August, Mrs X said any other debts were negligible and would be written off. She said Mr Y had no available funds at the time of his death and she would not make any further payments. The Council responded that the remaining funds it held would be applied to the outstanding care charges and that any remaining balance would be written off.
24. The Council provided its complaint response. It explained that from February 2024 it had managed Mr Y’s income and care costs. It said the DWP had contacted it and was told about the £4,000 held, which would be used to offset the debt. It confirmed it had since reimbursed the funeral costs. It also acknowledged it had not responded to Mrs X’s May correspondence and apologised for this.
25. Mrs X escalated her complaint. She said the Council should have informed her about the funds it held and questioned why the money had not been used to reduce the care charges sooner. She also said the DWP refused her funeral support application because of the undisclosed funds.
26. In October, the Council issued its final response. It confirmed the £4,000 had been used to reduce the outstanding debt, as reflected in the May invoice. It said the DWP had considered the funds available for funeral costs. It also said it would change its procedures to invoice outstanding charges earlier when it takes over financial management, rather than waiting until after a person’s death.

My findings

27. Funeral expenses take priority over most other debts, including outstanding care charges.
28. Upon Mr Y’s death, the Council’s authority as deputy ended. As it held funds belonging to Mr Y at that time, it should have clearly informed Mrs X, as executor of the estate, about those funds. It did not do so. This was fault.
29. The Council should also have followed the correct order of priority and ensured the funds were first made available to meet funeral expenses. Instead, it offset the funds against outstanding care charges. This was also fault.
30. However, when Mrs X later provided evidence of the funeral costs, the Council reimbursed her in full. While Mrs X says she took out a loan to cover these costs, she has not provided evidence of this. I am therefore satisfied the Council’s actions did not cause a significant remaining injustice.

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Action

31. Within three months of my final decision, the Council has agreed to review and update its procedures for managing finances where it acts as deputy. This should ensure that when a person dies, the Council:
• promptly identifies and contacts the executor or personal representative;
• clearly informs them of any funds held; and
• if applicable, considers and prioritises reasonable funeral and testamentary expenses.
32. The Council should provide us with evidence it has complied with the above actions.

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Decision

33. I find fault not causing injustice. The Council has agreed actions to remedy injustice.

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Investigator's decision on behalf of the Ombudsman