Powers of Attorney and Inheritance Tax Planning – the do’s and don’ts.

In  a recent decision made by Senior Judge Lush in The Public Guardian v AC & Anor [2014] EWCOP 41 (05 November 2014) – it was held that an attorney appointed under a Lasting Power of Attorney had behaved in a way that “contravened his authority and has not been in P’s best interests”.

It is a fundamental principle of acting as an attorney (or deputy) that all actions must be in the best interests of the donor (or P). Simply being able to sign a cheque book because the power of attorney or court order says that such signatures can be made, does not confer authority to make payments without proper regard as to why these payments are made.

The other issue that arose during the case concerned inheritance tax planning. Senior Judge Lush makes it clear in his judgment that “s12 of the Mental Capacity Act 2005 confers on attorneys a limited authority to make gifts of a reasonable amount on customary occasions. If attorneys wish to make more extensive [gifts] for Inheritance Tax planning purposes, such as setting up monthly standing orders of £250 to themselves, they should apply to the Court of Protection for an order pursuant to section 23(4) of the Act”.

Judgments such as this make me worry about the lack of knowledge of attorneys and deputies.

As a solicitor specialising in this matter, I spend a lot of time reading case law, statute, attending courses and liaising with other professionals. I carefully consider the decisions made by my colleagues who are professional attorneys (for whom I act) and ensure that all decisions are carefully recorded and accounts maintained.

Accepting an appointment as attorney does not automatically mean that someone has all the necessary financial and legal skills to manage the affairs of another. With great power comes great responsibility.

For information about the duties of an attorney or putting in place a Power of Attorney please contact Heledd Wyn on 0845 209 1495.

Clarke Willmott’s Court of Protection team

Chambers and Partners 2015 has been published today – the directory that identifies the most outstanding law firms and lawyers in the UK and internationally.

Until a few years ago Clarke Willmott didn’t have a Court of Protection team, so perhaps we can be forgiven for being extremely proud and pleased at seeing the team’s first entry in the UK-wide rankings.

The entry acknowledges our expertise and capability, but for the team – and particularly for this type of work –  it was more significant that clients commented on our  “willingness to act above and beyond.” 

We really do appreciate the kind comments, and look forward to carrying on supporting individuals and families caring for elderly and vulnerable relatives.

Court of Protection: Autonomy and empowerment of the individual – the view from the other side

Autonomy and empowerment were discussed with great enthusiasm at our recent conference. The focus of the day was on health and welfare matters and the implications on P.

Health and welfare matters in the Court of Protection come under the auspices of the family court. This means that there are parallels to be drawn with the treatment of children in the courts and that their welfare is paramount.

It was fascinating to listen to the various speakers talk about their involvement in some extremely high profile cases concerning individuals and their welfare. We heard from Professor Hugh Rickards about his clinical experience of assessing capacity, barrister Simon Burrows spoke about the Cheshire West decision and the far reaching implications; six months on – are we all living in a ‘gilded cage’? The keynote speaker, Mr Justice Baker, was utterly compelling in his views on the treatment of P in the Court and the way that P and their welfare must be paramount (again, echoing the overriding principle of the Children Act).

I could go on! As a property and financial affairs lawyer who specialises in mental capacity and Court of Protection applications, the world of health and welfare practice has striking implications. Very often, we are called upon to consider whether the Court should authorise gifts or a statutory Will. This can often come down to a rather clinical exercise of ensuring that P’s financial health is catered for and I think that there is a danger of forgetting that P is at the centre of any decision. It would be very easy to look at the balance sheet, decide that P has enough money to pay for their care and consider my obligations discharged.

For me, the conference reinforced the fact that P’s wishes, feelings and best interests must be at the heart of any decision made by the Court and those involved in P’s affairs – whether that decision is about where they are to live, or whether their excess assets can be gifted to a close relative who enjoyed this patronage prior to P’s incapacity.

Most of all, even though P is anonymous in court proceedings, we must never forget that they are a real person who needs to be taken care of.

For further information on this issue please contact Heledd Wyn on 0845 209 1495 or heledd.wyn@clarkewillmott.com

A map through the forest of Court of Protection forms

For anyone involved in Court of Protection proceedings the number of forms to be completed and signed by various parties can be something of a daunting process.  Caroline Featherby, a Solicitor in Clarke Willmott’s Court of Protection team, has summarised the forms and their function below.

The following forms are required when making an application to the Court of Protection for the appointment of a deputy:

  • COP1 – this is the application form and whenever one of these is submitted a cheque in the sum of £400 must accompany it (if none of the exemptions apply)
  • COP3 – this is the assessment of capacity that needs to be completed by a medical practitioner confirming that P does not have capacity
  • COP4 – the deputy declaration is completed by the proposed deputy
  • COP9 – this is an additional form to be completed if the application needs to be placed on the fast track system (for example if the sale/purchase of a property is imminent). This will sometimes be accompanied by a COP24 witness statement if further information is required.

Once the application has been sent to the Court, they will respond within 2-3 weeks with an issued COP1 bearing the stamp of the Court of Protection. The relevant persons then need to be served with the following forms.

  • A respondent – needs to be served with a copy of the issued COP1 and a COP5 for them to complete and return. The COP5 confirms their consent to the application.
  • A person to notify – needs to be served with a COP15 notice and a COP5 to complete and return as above.
  • P – needs to be served in person with a COP14 notice; a COP20A needs to be completed by the person who notified P and then returned.

The applicant then needs to send the following forms back to the Court:

  • Completed COP5’s from all respondents and persons notified
  • COP20A confirming P has been notified
  • COP20B confirming the respondents and persons to be notified have been notified

Upon receipt of the COP20A and B above the application will then be considered by the Court.

When the Order is granted a further form will be sent to the applicant in relation to setting up the security bond with Deputy Bond Services (DBS). Once the Court have been informed by DBS that this is in place, they will stamp and send out the final order to the applicant.

A further COP14 is served upon P on granting of the final order to inform them that an order about them has been made by the Court of Protection.

Now that the deputyship is in place the deputy can proceed with managing the property and financial affairs of P.

Between 6 and 8 weeks before each anniversary of the deputy appointment, the Office of the Public Guardian will contact the Deputy and ask for the OPG Report to be completed and returned to them. This report details all decisions made through the year and a record of all income, expenditure and capital.

If you require any further information in relation to any of the Court of Protection forms of deputyship matters generally, please contact Caroline Featherby on 0845 209 1358.

Next time I will be discussing what happens when someone objects to a Court of Protection application.

Court of Protection: Autonomy and empowerment of the individual

On 17 October 2014 Clarke Willmott is hosting a one day conference ‘The Mental Capacity Act 2005: Promoting Autonomy and Empowerment’.   Ahead of the conference Joanna Burton looks at the way legislation has evolved over the past forty years, placing individuals at the centre of the procedures that affect them.

Empowerment of the vulnerable individual lies at the heart of our work, whether that individual has capacity or is unable to make decisions relevant to his or her welfare, and whether we are acting on behalf of the vulnerable person, or for a family member, friend, carer or advocate. Professor Hugh Rickards will talk to us about his clinical experience of assessing capacity at the conference.

Over the last twenty five years there has been a gradual but consistent development in health and social welfare legislation putting empowerment of the individual at its core.  The Children Act 1989 was, perhaps, the first step in this process, making the ‘welfare of the child paramount’; it is the right of the child to have contact with both parents not the right of the parents to have contact with their child.

The protection of human rights has been an important development and since the European Convention on Human Rights became enshrined into the law of England and Wales, Scotland and Northern Ireland in 1998, all individuals in the United Kingdom have their rights under that convention protected.

Under Article 8 the individual is protected from arbitrary or unnecessary interference from the state in his or her private and family life, and it can also provide leverage upon the state to provide services to ensure that P’s rights under Article 8 are not breached.

In the recent case of P (Appellant) v Cheshire West and Chester and another and P and Q v Surrey County Council [2014] UKSC 19 Lady Hale spoke of the ‘universal character’ of human rights and underlined that ‘people with disabilities have the same human rights as the rest of the human race’ She spoke further of the State’s ‘duty to make reasonable accommodation to cater for the special needs of those with disabilities’.   Simon Burrows will be talking about this case, and  its implications six months on.

Throughout the 1990s various pieces of anti-discriminatory legislation were passed, culminating in the Equality Act 2010.  At the core of the Equality Act 2010 is the individual’s right to be treated equally and have equal opportunities irrespective of age, gender, disability,  race, colour, creed or sexual orientation. Obligations lie with the employer, or the provider of services and ultimately the state to ensure that the principle is respected and acted upon.

In October 2007 the Mental Capacity Act 2005 came into force.  Fundamentally the MCA provides the legislative framework to ensure that an individual who lacks capacity to make decisions is treated with the same autonomy and respect given to adults with capacity.  Any actions or decisions made on behalf of P must be in P’s best interests.   The Act promotes and, in certain circumstances, makes it a duty for an Independent Mental Capacity Advocate, an IMCA, to be appointed to be the voice of P.  I would like to see an IMCA appointed for P when any major decision is being made, irrespective of whether other family members are willing to speak on P’s behalf.  In my view an IMCA is the acknowledgement of the autonomy of P and should be a fundamental part of P’s armoury. Jakki Cowley and Sue Lee from ‘Empowerment Matters’ will be talking about their work as IMCA’s and their important research which has recently led to the publication of their ‘Guidance for Assessing Supporting and Empowering Specific Decision making’.

The Court has been at the forefront of empowering P.  Jurisprudence has set the bar low for assessing capacity.  Our key-note speaker, Mr Justice Baker has discussed (in CC and KK and STCC [2012] EWCOP 2136) maximising the entitlement of the individual to make his or her own decisions, however unwise they may be.   Best interest decisions made by the court have tended to resist the risk averse decisions that might be made by a local authority and have enabled P to go on holiday or return home when risks may appear to others to be quite high; the case of Manuela Sykes which I discussed in May is a prime example.   Mr Justice Bakerwill be our key note speaker at the conference on 17 October 2014  giving his thoughts on cases that have been before him recently.

The Court of Protection rules and procedures also place P at the centre of the case, requiring that P is served with any application to the court and that those interested in his or her welfare are also notified.  In my view, however, it is an anomaly that P does not have to be joined as a party to Court of Protection proceedings.   P is almost always joined in ss15,16 and s21A MCA 2005 health and welfare and deprivation of liberty proceedings, so for P to have potentially no part in proceedings where life changing decisions are being made for them, or where their liberty is at stake, this is in my view a breach of Article 5(4), Article 6 and potentially Article 8. It is our understanding that clarity on this issue is being sought as permission has been requested to appeal Sir James Munby’s recent decision in Re X and others (deprivation of liberty) [2014] EWCOP25 that P may not have to be joined in deprivation of liberty proceedings that do not fall under s21A MCA 2005. Watch this space.

Although I fully acknowledge the logistical and financial difficulties in P’s participation and representation in proceedings, in my view it is P’s fundamental right under Article 6 and rather than being brushed over, this needs to be addressed.   If P lacks the capacity to litigate (and most P’s in Court of Protection proceedings do) he or she will need a litigation friend.  There is a real shortage of people willing to act as litigation friend to P and the pressure on the Official Solicitor (OS) as litigation friend of last resort is overwhelming.   Clarke Willmott has been in the forefront of encouraging and supporting advocates and RPRs to be litigation friends to P Sophia Roper from the Office of the OS will be speaking at our conference and we will no doubt cover this problem in discussions.  Perhaps, as with the Court of Protection Panel Deputies, the court could consider setting up a panel of Litigation Friends.

The financial issue of P’s participation in the proceedings must also be considered. Court of Protection proceedings are very costly and few fall below £10,000 by their conclusion.  Non means tested legal aid is only available to P in s21A MCA proceedings which challenge a DOLS Standard authorisation.  Legal Aid for all other proceedings is means tested.  We often act for individuals who have savings of less than £15,000, but more than the £8,000 legal aid limit. Until their savings have been whittled down in legal costs to below £8,000 we cannot apply for legal aid, and that is without taking into account a capital contribution they will have to pay if they have savings of more than £3,000.  Non means tested legal aid is available for a child in child care proceedings, and we feel quite strongly that it should be available for P who lacks the capacity to litigate so that they can be properly legally represented in all proceedings concerning their life and liberty in the Court of Protection.

The Care Act 2014 comes into force in April 2015, placing “wellbeing” at its core and setting out that a local authority must have regard to “…the importance of beginning with the assumption that the individual is best placed to judge the individual’s wellbeing”. In the words of Martin Luther King ‘ It may be true that the law cannot change the heart but it can restrain the heartless. It may be true that the law cannot make a man love me but it can keep him from lynching me and I think that is pretty important, also’.

Laws and jurisprudence may not on their own change hearts but they can change practice. To properly empower our most vulnerable individuals we need to use all the resources available. Notwithstanding the austerity measures the legislation and our courts are clear that the rights of the individual are at the core of any process.

For further advice about capacity issues please contact Joanna Burton or a member of our Court of Protection team.

Older People’s Day

1 October 2014 is Older People’s Day – a UK event that joins the UN International Day of Older Persons to celebrate the achievements and contributions that older people make to our society and challenge negative attitudes and outdated stereotypes.

The welfare and happiness of older people often requires an understanding of complex legal issues relating to their care. This can seem like putting the pieces of a jigsaw together – until everything is in place it is difficult to see the solution, but the process can begin with finding the right person to talk to, for example to arrange a care or finance assessment.

The Elderly Care team at Clarke Willmott is uniquely qualified to provide advice and assistance. In addition to our knowledge of the law, we understand that the circumstances for each family will be different. Whether you want to put arrangements in place for yourself, or if you are supporting someone who needs help due to old age or dementia, we can help.

Meet the team:

Anthony is a Partner and specialises in Court of Protection and elderly care advice. He works with families, case managers and local authorities to ensure that the financial affairs of people who cannot manage their own finances are properly managed. He is the only Court of Protection panel deputy in Bristol and Somerset. He has undertaken the CF8 qualification in Long Term Care and is a full member of Society of Trust & Estate Practitioners and Solicitors for the Elderly (SFE).

Jess Flanagan is an Associate whose expertise includes residence, care and contact disputes between private individuals and public authorities. This might concern an adult who lacks the mental capacity to make important welfare decisions themselves. Jess has specialist knowledge of Safeguarding procedures, Community Care law, the Deprivation of Liberty Safeguards (DoLS) framework and Mental Health Act 1983, including representation of detained patients in the Mental Health Review Tribunal.

Heledd Wyn is an Associate who specialises in elder client issues, including estate planning, powers of attorney and Court of Protection applications. Heledd has a particular interest in the care of older people with capacity issues, which may involve care home funding, powers of attorney and Court of Protection matters. Heledd is a secretary to the Somerset Regional Group of SFE and has been co-opted onto the STEP Mental Capacity Special Interest Group. She assists with the dissemination of information regarding capacity to members of STEP via the group’s newsletter.

Joanna Burton is a Solicitor whose background is in local authority work. She has considerable experience of advising in respect of the safeguarding process and works with individuals who have suffered abuse from carers, family members, friends and acquaintances which may have occurred at home or in residential care homes or supported living accommodation. Joanna also has considerable expertise in understanding social care needs assessments, the calculation of personal budgets and direct payments, charging for services and the statutory obligations of local authorities to provide and fund such services.

Caroline Featherby, Jacqui Alexander, Terri Stone and a team of legal assistants help us provide a service of the highest of standards.

We are all delighted to be supporting Older People’s Day – today and every day!

For further information or to discuss elder client issues, please contact a member of our team.

Happy Birthday Leonard

“I stumbled out of bed
I got ready for the struggle
I smoked a cigarette
And I tightened up my gut
I said this can’t be me
Must be my double
And I can’t forget, I can’t forget
I can’t forget but I don’t remember what”

Leonard Cohen

I don’t think that there can  be any doubt that the huge technological advances affecting all our lives are going to dramatically change healthcare, the way we interact with doctors and the long term prognosis for many diseases.

The ability to map individual DNA may well transform our ability to understand and fight diseases.  We will be monitored by iPads and watches following our every heart beat with the real live data of patients of the  NHS uploaded and available to influence treating options.

The upshot – we are going to live longer.  It could be a lot longer.  The new born of today will probably live beyond 100 and the politicians and general public continue to march towards a very major funding crisis.

For instance, we await further details on the Universal Deferred Payment Scheme introduced by the Care Act 2014 but the pledge that no-one needs to sell their family home to fund their care is simply not supported by the published guidance or sustainable as a public funding proposition.  Some people will not have to sell their houses but an awful lot will.  Will Local Authorities have the resource to support self funders to pay their care fees to avoid the sale of the family home?

So what has this all to do with Leonard?  When Cohen left the music business for a Buddhhist retreat in 1994 many thought his retirement was permanent.  The subsequent misappropriation of $5 million from his bank account by his manager put pay to any such plans.  As he turned 80 this week few would have reckoned on Cohen releasing one of the finest albums of the year. For the generation of tomorrow Mr Cohen’s productivity at eighty might not be so unusual.

Happy  Birthday.




An Attorney exposed: a word of caution

There are important differences between a Lasting Power of Attorney (LPA) and a Deputyship which mainly concern the levels of supervision and reporting duties that are placed upon the appointed persons.

A Deputy is under a duty to complete an annual report on the anniversary of the order of appointment. The report must provide details of all decisions made, the people the Deputy has had contact with and all monies received and spent throughout the year. It is not unusual for the Office of the Public Guardian (OPG) to call the Deputy on receipt of the report to request additional information. The OPG may also send Visitors to the Deputy periodically to check that everything is in order and decisions are being made in P’s best interests.

By comparison, an Attorney appointed by an LPA is under no duty to report to the OPG on a regular basis and visitors are not sent out regularly to speak to the appointed Attorney.

This varying level of supervision by the OPG may lead people to believe that where an Attorney is appointed, as opposed to a Deputy, P is more vulnerable and at greater risk of financial abuse. However, the OPG are just as thorough in following up any concerns raised about an Attorney’s decision making and taking action where there are questions about whether the Attorney is acting in the best interests of P.

The recent decision in Re DP: Public Guardian v John Marney (2014) EWCOP 7, (2014) MHLO 69 demonstrates the OPG’s diligence in following up and acting upon allegations of financial abuse. This case is significant in that the Senior Judge ‘named and shamed’ the Attorney and argued that “Nothing JM has said, or which could sensibly be put forward on his behalf, provides any reason why, looked at from his perspective, he should be spared the consequences of his misbehaviour.”

This is a bold decision by the Senior Judge and demonstrates that not financial abuse will not be tolerated. Regardless of whether someone has been appointed as an Attorney or a Deputy, the Court will not hold back in making such misconduct known to the public. If you would like further advice about putting in place a Power of Attorney, please contact Caroline Featherby or a member of our Elderly Care team.

Guardianship of the property of missing persons

This consultation on the Guardianship of the property and affairs of missing persons caught my eye last week.

What happens to the finances of a missing person? According to the charity Missing People approximately 110,000 adults go missing each year. What happens to their bank accounts, mortgages etc? How do their relatives manage their finances if they do not have access to the missing person’s accounts? Difficulties will arise when bills cannot be paid, such as a jointly held mortgage; or when direct debit payments cannot be cancelled, perhaps for magazine subscriptions or health care, eroding the assets of the person who has gone missing.

This consultation seeks to remedy some of the problems that arise when someone goes missing. Proposals include the appointment of a guardian who will act in the financial best interests of the missing person.

The problems highlighted in the consultation are similar to those experienced when someone loses capacity and has not put a power of attorney in place. Family members will find that payments continue to be made from accounts unchecked and that the assets of the person who lacks capacity are not being managed in the most appropriate manner. As a private client lawyer, I often work with people who have lost capacity to manage their affairs. In the best case scenario (if such a thing exists) they have put in place a power of attorney. If they have not, then often an application needs to be made to the Court of Protection to appoint a deputy. This can be a family member, or sometimes a court appointed panel deputy will be necessary – like my colleague Anthony Fairweather.

When someone loses capacity, their affairs need to be managed for them – operating bank accounts, paying bills etc. This is not an easy task, but it does mean that bills will continue to be paid and life can continue. I often liken powers of attorney to house insurance – you hope your house doesn’t burn down, but you are very glad to have your insurance in place if it does. A little forward planning can save an awful lot of anxiety for families trying to make decisions in the most difficult of circumstances.

The consultation seeks to assist those whose loved ones go missing and its aims are to be applauded. I welcome the proposals as they raise awareness of the problems that are faced by families every day.

For advice about managing the affairs of someone who lacks capacity, please contact me or a member of our Court of Protection team.

Care Fees Funding: When is your home really your home?

Many people fear losing their family home to pay for care fees in later life, but in some circumstances the value of a property will be disregarded ie it will not be taken into account when assessing someone’s ability to contribute towards the cost of care.

When might my home be disregarded?

Under the current rules anyone with assets in excess of £23,250 will be required to pay for their care in full. Only when assets fall below £14,250 will those assets be disregarded in full. Individuals with assets between £14,250 and £23,250 are assessed as to how much they should contribute towards their care fees. The value of a resident’s permanent home is disregarded in making that assessment:

  • during the resident’s first 12 weeks in care;
  • if the house was acquired for occupation by a former partner of the resident; or
  • if the house is occupied by the resident’s partner, a relative who is aged over 60 or incapacitated or a child “as their home.”

Mrs Walford’s case

Earlier this year the High Court considered this issue for the first time and threw some light on how the relevant legislation in this area should be interpreted.

Mrs Walford was a widow with one child, Glen Walford. Ms Walford, who was over 60, is an acclaimed theatre director who works all over the world. Ms Walford had lived elsewhere for periods of time but because of her work commitments she had never owned any property, always renting and regarding the places in which she resided as temporary accommodation. Ms Walford had a bedroom, downstairs office, caravan and storage shed at her mother’s house and kept most of her belongings there. She had also paid the cost of maintaining the house and garden since her father’s death some years before.

Worcestershire County Council, which carried out the financial assessment, considered Ms Walford’s case and in November 2011 and decided to disregard the property. But the Council then reversed the decision on review the following March stating that, in their view, her mother’s house was more like a holiday home for Ms Walford and was not her home within the meaning of the legislation. Ms Walford appealed.

The High Court decision

The Court decided:

  • whether a property is a home depends on the degree and nature of occupation. As it is possible to have more than one home, for these purposes “home” should mean someone’s only home or main home if they have more than one home.
  • the Council was entitled to take into account where a person was registered to vote and where they paid Council Tax.
  • the Council had been wrong to use a test of actual occupation and/or permanent residence and to concentrate on the position as it stood when Mrs Walford entered residential care. Whether the property should be disregarded should be reconsidered whenever there was a change in circumstances.

The judge quashed the Council’s decision, ordering them to reconsider the case and decide the issue using the correct criteria. Worcestershire County Council are believed to be appealing and there is no indication at present as to whether Ms Walford has succeeded in having the property disregarded.

The practical effects of this case

As a result of this case we now know that:

  • for a property to be disregarded because it is a resident’s relative’s home, it does not have to be the relative’s only home, but it does need to be their main home.
  • in making that determination a Council is entitled to take into account where the relative is registered to vote and pays Council tax.
  • the Council should not determine the question by reference to the actual occupation or permanent residence of the relative.
  • if there is a change of circumstances the question of the property disregard should be reconsidered.
  • if other Councils have applied the disregard rule on the same basis as Worcestershire then it is possible that residents or relatives will now be able to appeal previous decisions.

For more information, please contact Heledd Wyn on 0845 209 1495 or email heledd.wyn@clarkewillmott.com.