Category Archives: Court of Protection

Make Gifts using a Power of Attorney

When you use a power of attorney (Lasting or Enduring) to make gifts to anyone (including yourself) or to take expenses, there are no specific legal rules. If there is a dispute or a complaint, then the Court of Protection will be called upon to make a ruling. We suspect that a lot of attornies or indeed deputies will be left somewhat embarrassed – or worse, so you might want to read through this case.

Much of English Law is based on precedent – the decisions made previously by Judges, as to what is right in a particular set of circumstances. Other judges may in future find reasons to distinguish their case from this one and make a different decision, but this seems to be a great place to start if you want to get things right.

There are a number of important cases that we will writers must have an understanding of. Not all law is statute based and many of these cases form the basis of the law that applies to lasting powers of attorney.

This is an overview of the case MJ and JM v The Public Guardian [2013] EWHC 2966 (COP). It concerned the authority of a deputy to make gifts under section 12 of the Mental Capacity Act 2005 which allows the following gifts:

Gifts to charities that the donor may have given to; and

Gifts to family members, friends or acquaintances of the donor on customary occasions.

Anything beyond this, approval is needed from the Court of Protection. On Whilst this case a deputy was involved, but the judge in the case said the decision would apply equally to the attorneys of a Lasting Power of Attorney or Enduring Power of Attorney.

Facts of this case on Gifting under a Deputyship.

The case concerned GM, a 92 year old woman suffering from vascular dementia. Her two property and financial affair deputies had made gifts to themselves, their relations and to charities on behalf of GM and now had applied for retrospective approval of those gifts. The judge asked the Public Guardian to investigate and review the gifts and recommend whether or not approval should be granted. It transpired that well over 40% of GM’s assets had been given away! The OPG investigation identified a number of gifts that did not deserve approval along with advising that some “expenses” were in reality gifts to the deputies, these being a car and computers.

Decision: the dangers of generosity…. 

Some gifts were approved, mainly those to charity and one recommended by the Public Guardian’s report for approval. All other gifts were not approved, and the deputies were ordered to repay them. The expenses were also considered unauthorised gifts.

So what is it reasonable to gift under a Power of Attorney?

Gifts falling within a de minimis exception were also approved. The court recognised that there are exceptions to the powers granted in section 12 of the Mental Capacity Act otherwise the court would be overwhelmed by applications.

Senior Judge Lush defined the de minimis exception to be the annual IHT exemption of £3,000 and the annual small gifts exemption of £250 per person, up to a maximum of ten people in the following circumstances:

  • where the person has a life expectancy of less than five years, and
  • their estate exceeds the nil rate band for IHT purposes, and
  • the gifts are affordable having regard to the person’s care costs and will not adversely affect the person’s standard of care and quality of life, and
  • there is no evidence that the person would be opposed to gifts of this magnitude being made on their behalf.

The judge also confirmed that the de minimis exception does not apply to potentially exempt transfers or to the use of normal expenditure out of income exemption and authority would still be required for these.

Senior Judge Lush also gave some guidance on when a gift is considered reasonable:

Firstly, the gift must be a value that can properly be described as not unreasonable. This would be ascertained by considering all circumstances, but emphasis is given to the size of their estate.

By estate, a person’s current and anticipated income and capital, expenditure and debts must be considered.

The first and paramount thing to consider is whether the gift is in the person’s best interests. Other circumstances, in addition to the size of the estate, include but are not limited to:

  • the extent to which the person was in the habit of making gifts or loans of a particular size or nature before the onset of incapacity,
  • the person’s anticipated life expectancy,
  • the possibility that the person may require residential or nursing care and the projected cost of such care,
  • whether the person is in receipt of aftercare pursuant to section 117 of the Mental Health Act 1983 or NHS Continuing Healthcare,
  • the extent to which any gifts may interfere with the devolution of the person’s estate under his or her will or intestacy, and
  • the impact of Inheritance Tax on the person’s death.

So be careful in choosing your attorneys by making your choice well in advance, and make sure they understand your wishes.  Most of us will need other to make decisions for us at some point, maybe only for a brief period after an operation, accident, or sadly, dementia.  But ist pays to get sound advice now, so please do contact us to set the wheels in motion – it takes a while, and once the need arises, it is too late and a deputyship (at a far higher cost) is needed and the choice is no longer yours.

What is a deputy?

Coronovirus: Alarming Drop in Mental Capacity

Coronavirus is making life difficult for everyone, but more so for those whose mental capacity is already reduced. Enforced social isolation increases the stresses on everyone and tends to make us feel more anxious, stressed, worried, sad, bored as well as lonely and often frustrated. Advisers report an alarming drop in the mental capacity of those who were previously reasonably ok.  

All of these are things which tend to reduce peoples ability to cope with life and to be able to make Lasting Powers of Attorney (which is our mission.) Whether the effects will be wholly lasting or not remains to be seen, but many people will slip beyond the point at which Lasting Powers of Attorney can be set up, leaving an application to the Court of Protection for a Deputyship as the only remaining route. Bear in mind that only financial Depoutyships are usually granted, leaving Health and Welfare matters in the hands of the Court – and that includes where people live Whether that application is made by the family or by Social Services, it is at the expense of the person suffering reduce mental capacity.

Experience has shown that it is not always easy for people to throw off the yoke of Deputyship even should they fully recover, and when the Deputy is a professional it is likely to be very expensive. Family members may find it difficult to cope with the bureaucratic and record-keeping issues associated with deputyship.

Obviously, everyone over 18 should have Lasting Powers of Attorney (do you?) as misfortune can strike at any time, but here are some tips from the NHS as to how to best keep up your, or a relative, or friends mental capacity:

1) Keep Socially Active

Clearly, that doesn’t mean what it used to. Phone calls, Facebook messages, video calls etc all help. Though the trouble is many older people won’t be up to speed on some of these, so will suffer more.

2) Talk About Your Worries

Very few people are NOT finding the current situation stressful. So talk about your worries and concerns, and encourage the vulnerable to share their worries with you. A worry shared is a worry halved as they say. A little reassurance goes a long way. The Government even has a Chatbot to talk about your worries – why not try it out?

3. Help and Support Others

Just because you are feeling a bit down doesn’t mean that you can’t join Facebook and other groups and encourage other people. A friendly ear helps others feel it isn’t just them.

4. Finances and Regulations

If finances are a problem, or you are not sure what the recommendations are for social matters, check the Government website for advice. That is what it is there for.

5. Keep Physically Active

The fitter your body is, the more likely your mind is to stay fit too. Resist the urge to be a total couch potato, and get up and walk about. Maybe do some gentle stretches once an hour. Exercise will help you sleep too. Maybe find some gentle exercise videos on Youtube. If you can, do more walking than you would normally, or get on the bike if you are up to it.

6. Do things you enjoy

Reading, listening to music (my favourite), gardening, walking, running.

7) Don’t Listen to Negative Fake News

Go to the Government website o#r the BBC or the NHS for news and suggestions – don’t go to the more sensational newspapers who like to shock you, even if the copy under doesn’t match the sensational headline!

8) Relax

Relaxation techniques can help.

Those are just a few suggestions. if you are feeling really desperate, visit this page?

Contact us to organise Lasting Powers of Attorney before it is too late. 

Who Needs Lasting Powers of Attorney? Anyone over 18…..

Who Needs Lasting Powers of Attorney?

Anyone over 18 who might have an accident or disabling illness. The story which follows is about a soldier, but the fact that he was a soldier is irrelevant as he was assaulted in a bar. he could just as easily have been crossing the road.

This is the story of a soldier who was injured at the age of 23, and the vastly expensive Court case mounted by his family to get what they considered suitable treatment.  They were opposed by expensive lawyers working for the Ministry of Defence and the Official Solicitor. Had the family been appointed under both types of Lasting Power of Attorney, the decision would have been theirs.  It is not as if the chap could not make his feelings known, just that the lawyers felt he was not making an informed decision and should not be allowed to decide himself. The Judge in effect has to decide for him at very considerable expense, and whilst judges may be very wise, most of us would rather have these decisions made by husbands, wives or parents who know us well. Another example follows.

Who Needs Lasting Powers of Attorney: “A Hailsham couple have shared their story about early on-set dementia. Colin Ward was a healthy 52-year-old when he proposed to his partner Jane. Less than 18 months after their wedding, the couple’s lives were turned upside down when Colin was given the diagnosis of vascular dementia – at just 56 years old. Colin’s health started deteriorating almost immediately after their wedding. In 11 months, his condition had declined to such an extent that he had lost his job as a taxi driver and was unable to walk unaided.”

Who Needs Lasting Powers of Attorney?

We have long recommended that everyone over 18 should have both types of Lasting Power of Attorney. It isn’t just dementia which can bring about a loss of mental capacity and so a loss of control over every aspect of life.  That is a pretty dire prospect.  A trip on the pavement. A car accident. A stray golf or cricket ball.  Any of these can mean a prolonged period where your life is controlled by the Court of Protection who may well delegate their authority to Social Service or a local solicitor rather than your family.  Your family will not understand the complexities or costs of being under the control of the Court of Authority.  They may not have the cash or just be too shocked and busy to even ask us for help (we have Court of Protection experts.)

Who Needs Lasting Powers of Attorney – everyone over 18.

There is no reliable or sound course of action other than to contact us to make Lasting Powers of Attorney as soon as possible.  With our optional Peace of Mind Service, we can help you to get your Legal Planning organised – and keep it that way.

So please use the contact form or give us a ring on 01323 741208, and we’ll help protect you, your family and perhaps your cash too!