The Guardianship (Missing Persons) Act 2017 has now received Royal Assent and will be brought fully into force in 2018. The Act allows for the appointment of a guardian to manage the affairs of a person who has been missing for more than 90 days where certain conditions are met.
Where an adult has been missing for months or even years without known cause, families are often left with no means of administering that person’s financial affairs.
Under current law (The Presumption of Death Act 2013), the missing person’s spouse, civil partner, parent, sibling or child is required to wait at least 7 years or provide proof that the missing person ‘is thought to have died’ before they can apply for a ‘Declaration of presumed dead’. In the meantime, there is no mechanism which enables the dependants of the missing person to deal with their property and financial affairs and this can lead to serious practical problems.
Following calls for reform, the Coalition Government consulted on whether there ought to be a new legal process by which a person (“a guardian”) could be appointed to act on behalf of, and in the best interests of, a missing person. The government then issued a response paper which outlined the key features of the proposed scheme.
The outcomes of the consultation have now been enacted in the form of The Guardianship (Missing Persons) Act 2017 which received Royal Assent late April. However the commencement date of the Act has been postponed due to the recent General Election and the Act is expected to be brought into force by regulations in 2018.
Below is a summary of the main provisions of the Act:
(i) The Act defines “missing persons” as persons who are absent from their “usual place of residence” and “usual day-to-day activities” in circumstances where either their whereabouts is unknown (or not known with sufficient precision) or the person is unable to make and/or communicate decisions about his or her property or financial affairs for reasons beyond their control (other than illness, injury or lack of mental capacity).
(ii) An application for a Guardianship order will be possible once the person has been missing for 90 days. The order will last for up to 4 years and can be renewed on expiry.
(iii) Guardians must be over the age of 18 or a trust corporation and must consent to the appointment. In addition, the guardian must be ‘suitable’ having regard to the proposed guardian’s skills and knowledge and their relationship with the missing person. Note it will be possible to appoint two or more guardians at the same time or at different times.
(iv) The order may confer either a general power on the guardian in relation to the missing person’s property and financial affairs, or may be limited to specific rights and powers. These may include powers to sell property and make investments, resign from trusteeships held by the missing person and/or make a gift out of the missing person’s property. However, a guardian will be subject to certain restrictions, for example, they cannot make a will on behalf of a missing person or exercise powers conferred on the missing person as trustee.
(v) A guardian will be required to act in the best interests of the missing person and in this respect will be subject to duties similar to those of a trustee – the guardian will be supervised by the Office of the Public Guardian and will be required to file accounts in much the same way as a Deputy appointed under the Mental Capacity Act 2005.
(vi) A guardian appointed under the Act will only be able to make gifts “for the maintenance of, or otherwise for the benefit of, a dependant of the missing person” or where the guardianship order expressly authorises the making of the gift – either specifically or generally.
(vii) The Act offers protection for banks and financial institutions who deal with a person in possession of a guardianship order unknowingly after the missing person has been found (i.e. where the guardianship order has been varied or revoked). This is likely to be a source of reassurance to banks, who might otherwise be concerned about exposing themselves to liability in relying on the instructions of a guardian.
The new Act, which applies in England and Wales, will alleviate the practical problems currently faced by those who are missing a relative and enable banks and other financial institutions to act with greater legal certainty when dealing with the financial affairs of vulnerable or missing customers.
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