Unfortunately, for most clients who find themselves in this situation, the deputy order is the only way forward.
For those living in Scotland, the access to funds scheme may also be used to close and transfer cash from a CTF or Junior Isa, but only where no investments are held, so this may be of limited use.
Recent review
The government has recognised that this lack of access is a problem and the MoJ consulted on proposals for a new small payments scheme between November 2021 and January 2022.
The hope was that a new scheme could be implemented to temporarily allow a suitable person to be able to withdraw payments of up to £2,500 without needing to obtain the form of legal authority required under the MCA.
The government’s response was published in February 2023. They decided not to go ahead with allowing these small payments to be made.
While 87 per cent of respondents supported such a scheme, there was a lack of consensus about the safeguards needed to prevent abuse.
The government concluded the main issues lie with the court application process for obtaining the relevant legal authority and a lack of awareness of the MCA.
To combat this the government has committed to making it easier for digital applications to be made to the Court of Protection, and to work to raise awareness and understanding of existing rules.
It remains to be seen if the government will return to this issue any time soon – having just looked at it in detail recently, you would expect not, so clients will need to work within the current framework for now.
Planning considerations
It is easy to see how clients could be put off by all this, particularly where they have been managing their child’s affairs up until they turned 18. Many will have assumed they would be able to continue doing so past that point.
Where possible, start the conversation with your clients early. Inevitably there will be some clients who come to you only shortly before their child turns 18, or even afterwards. But good planning in advance can help prepare your clients and smooth the transition.
This will prevent delays accessing the funds and ensures they can continue to be managed in the child’s best interests.
Consider a deputy order as well as, although complex and costly to arrange, deputy orders are useful for the long-term management of their finances.
A key feature of Junior Isas is that access to the accounts is restricted, and withdrawals before age 18 can only be made where the child is terminally ill or has died. If the parents know from a young age that the child is unlikely to have capacity at 18, a Junior Isa may not be a suitable option.
