Compensation being spent on luxuries

[Gondolfin]

Hi, I wonder if anyone can help me. My brother was involved in an accident when he was very young for which he was awarded substantial compensation which was meant to be for him to live off for the rest of his life.

I am now worried that this money is being used to fund another sibling's wannabe celebrity lifestyle. This sibling has luxuries that they costing thousands, including a new car, despite not having a job. I cannot see how they can afford these without my mother dipping into my brother's compensation fund to pay for them.

My question is, is there a body that I can ask to investigate this to ensure the money is being spent for its rightful purposes?

Thanks for your help.

[nemesis45]

Re: Compensation being spent on luxuries

Hi, I wonder if anyone can help me. My brother was involved in an accident when he was very young for which he was awarded substantial compensation which was meant to be for him to live off for the rest of his life.

I am now worried that this money is being used to fund another sibling's wannabe celebrity lifestyle. This sibling has luxuries that they costing thousands, including a new car, despite not having a job. I cannot see how they can afford these without my mother dipping into my brother's compensation fund to pay for them.

My question is, is there a body that I can ask to investigate this to ensure the money is being spent for its rightful purposes?

Thanks for your help.

Good morning, welcome to LB.

Who is administering the compensation award?

A parent? Your brother himself?

nem

[Amethyst]

Re: Compensation being spent on luxuries

Does your brother have a solicitor who dealt with the compensation claim? normally these kind of payments are administered by a solicitor/wealth manager. Have you spoken with your mother or brother about this at all, without making accusations as you could easily be putting 2+2 together and coming up with 5. Your brother could have another income source or have taken out a loan, have the car on finance etc so I would tread carefully and find out the facts first. Is there a reason your mother would use your brothers funds to buy things for your brother but not for you ? ( not saying you want it to be spent on you, just any reason why your mother would treat you differently ?)

[Gondolfin]

Re: Compensation being spent on luxuries

Good morning, welcome to LB.

Who is administering the compensation award?

A parent? Your brother himself?

nem

Thanks for your reply. The award was administered by a solicitor but is now administered by my mother. As a result of the accident, my brother was left mentally disabled and unable to look after himself, he also has little concept of money so the award is held in trust for him. Some time ago, receipts had to be provided for any purchases from the award but that changed. Now, the award can be spent by the trustee with no oversight. My major concern is that this fund is being whittled down on gifts for this other sibling. My brother is incapable of working and will need that money to live on for the rest of his life, which will include significant care work as he gets older.

Is there a body that ensures that such compensation awards are spent responsibly?

[nemesis45]

Re: Compensation being spent on luxuries

Thanks for your reply. The award was administered by a solicitor but is now administered by my mother. As a result of the accident, my brother was left mentally disabled and unable to look after himself, he also has little concept of money so the award is held in trust for him. Some time ago, receipts had to be provided for any purchases from the award but that changed. Now, the award can be spent by the trustee with no oversight. My major concern is that this fund is being whittled down on gifts for this other sibling. My brother is incapable of working and will need that money to live on for the rest of his life, which will include significant care work as he gets older.

Is there a body that ensures that such compensation awards are spent responsibly?

Is there no other trustee for the fund?

It's difficult when families are involved this way me being a rather outspoken type would be asking
awkward questions whoever the trustee is showing just concern for your brothers future.

Maybe I read this wrongly but is " this other sibling " perhaps a half brother?

nem

[Openlaw15]

Re: Compensation being spent on luxuries

Thanks for your reply. The award was administered by a solicitor but is now administered by my mother. As a result of the accident, my brother was left mentally disabled and unable to look after himself, he also has little concept of money so the award is held in trust for him. Some time ago, receipts had to be provided for any purchases from the award but that changed. Now, the award can be spent by the trustee with no oversight. My major concern is that this fund is being whittled down on gifts for this other sibling. My brother is incapable of working and will need that money to live on for the rest of his life, which will include significant care work as he gets older.

Is there a body that ensures that such compensation awards are spent responsibly?

Trusts/ trustees

Important: Make sure that you are right first that the trustee for your disabled brother is exercising their trustee duties/ power unreasonably. A trustee can be removed and or another trustee appointed in their place. If the trust is not being used for its intended purpose the trustees can get into serious trouble, which will likely create family problems. Normally when large compensation amounts are paid out it's usually done in smaller installments, perhaps monthly for life rather than large lump-sums. This stops the hassle of families dipping into the compensation. Alternatively, discretionary trusts are set up so-called spendthrift trusts so that any assets cannot be wasted. Trustees have a duty (legal responsibility) to account to the beneficiary of the trust too for financial aspects. The trustee does not simply have the power to do what they want when they want as the court will intervene and has substantial powers to do so. If the trustee has abused their duties (breach) by helping themselves to money or gifts for other siblings, they are liable for damages (compensation) or any gifts confiscated. How old is your disabled brother? If you're right in what you're saying, do you know any responsible person who could be appointed as a trustee?

[NWHC]

Re: Compensation being spent on luxuries

Any changes in the administration of a trust fund have to be authorised

I believe you could apply to the courts to have the trust administered by someone other than your mother however this is a very drastic step.
If it were me I would be checking the exact terms of the award and the trust

[des8]

Re: Compensation being spent on luxuries

If you are concerned your brother is being financially exploited, and are not reassured by your mother's responses, you could refer your concerns to the local authority social services.

They can use the safeguarding adults procedures (set out in the Care Act 2014) to carry out an investigation and,if necessary, make a safeguarding plan or start proceedings in the Court of Protection.

[Openlaw15]

Re: Compensation being spent on luxuries

Thanks for your reply. The award was administered by a solicitor but is now administered by my mother. As a result of the accident, my brother was left mentally disabled and unable to look after himself, he also has little concept of money so the award is held in trust for him. Some time ago, receipts had to be provided for any purchases from the award but that changed. Now, the award can be spent by the trustee with no oversight. My major concern is that this fund is being whittled down on gifts for this other sibling. My brother is incapable of working and will need that money to live on for the rest of his life, which will include significant care work as he gets older.

Is there a body that ensures that such compensation awards are spent responsibly?

Practical options:

Yourself or another become:
Trustee, or:
Deputy (through court of protection): https://www.gov.uk/become-deputy/fees

Facts: Deputy fees: £400 to become a Deputy; £500 if court hearing required. £320 costs each year.
Trustee fees: likely to become one (appoint), may be a few hundred setting up.Plus: a family member aged 18 can become a Deputy; keeps your family life private without social workers being involved. Court hearing may not be necessary.

Alternatively to appointing another person as trustee, there is another option and that is to become a Deputy through the Court of Protection. A Deputy will manage the affairs of the person who does not have capacity (ie too disabled legally to manage their own affairs). It means you do not have to get social services involved and keep things private if this is what you prefer (if it were me it's what i'd do). It will require someone who is responsible and annual reports must be completed, so an accountant's advice may be helpful at the annual stage, ie part-time accountant may be a suitable option. If social services get involved it could create lots of problems and are likely to scrutinise your family. I think the best way forward for you in your situation if your mother really is exploiting the trust fund is to appoint your self (if you're of age, able to) or another competent person as either trustee or Deputy (see link above). If the Court of Protection appoints a professional to manage the trust it will likely be more costs away from the trust fund. The Deputy whilst a responsible position is probably a better option than a trustee. The court will only scrutinise the Deputy's role if there is reason to. A trustee's role is very demanding though. I have checked the Deputy's annual report and it is pretty straight forward to complete (but use accountant for safety if you/ other person needs to). You do have options so do not feel like all is lost.

Deputy Guidance: https://www.gov.uk/government/upload...puty_guide.pdf

Deputy's completion of annual report: https://www.gov.uk/government/upload...eport_form.pdf

[Gondolfin]

Re: Compensation being spent on luxuries

Thank you all for your responses, there's certainly a lot to think on but I am glad there are courses of action available.