Probate - reasons for the granting of a gift
Before : |
M. J. Thompson, Esq., Commissioner, and Jurats Austin-Vautier and Opfermann |
IN THE MATTER OF PATIENT A (HIS MAJESTY'S ATTORNEY GENERAL CONVENED AS PARTIE PUBLIQUE)
Advocate K. L. Kavanagh for the Attorney General.
B1 of the daughters of the Patient A.
And One of the Two Delegates of A.
judgment
the COMMISSIONER:
1. This judgment contains our reasons for granting permission to the two delegates of Patient A to gift one-third of the value of A's investment fund held with Canaccord Genuity Wealth Management to themselves to support the four grandchildren of Patient A.
2. Patient A was diagnosed with Alzheimer's disease in 2017 and is elderly. She currently resides in a care home.
3. She was assessed as lacking capacity to manage her property and affairs in October 2021 and her daughters B and C were appointed as delegates on 19 November 2021 pursuant to Article 24 of the Capacity and Self-Determination Law 2016 ("the 2016 Law"). B has two children, one of whom is at university and one of whom is currently taking a gap year before commencing higher education. C has two children who live and work in England and who are both looking to acquire their first homes.
4. Patient A's husband passed away in 2021. While he had made a Will leaving two-thirds of his movable property to A and one-third to B and C, at his death his assets were held jointly with A and so ownership passed to A by survivorship; this was not challenged by B or C.
5. A's Wills, drafted at the same time as those of her husband, leave everything to her children. In view of her dementia, those Wills will not be changed and in due course therefore A's property will pass in equal shares to B and C.
6. A owns two immovable properties both of which are rented; A is also entitled to a small pension. This income is sufficient to meet her share of the residential costs of the care home where she resides after long-term capacity benefit is paid to that nursing home. The only other expenses that are incurred on behalf of A relate to repair and maintenance costs for the properties she owns. There is therefore more than sufficient income for A's needs to be met.
7. A also holds an investment portfolio managed by Canaccord which is currently worth around £320,000. It is this fund which the delegates wish to access for the benefit of A's grandchildren (their children).
8. The only express provision dealing with gifts is in relation to Lasting Power of Attorneys under Part 2 of the 2016 Law which does not apply to court appointed delegates. Article 15(2) of the 2016 Law. recognises that a Lasting Power of Attorney for property and financial affairs may give gifts on customary occasions to persons who are related to or connected with the person whose affairs they are responsible for. Article 15(3) describes what is meant by a customary occasion and covers occasions such as anniversaries or birth or marriage or the formation of a civil partnership, or any other occasion upon which presents were customarily given by a person whose affairs are now looked after by a Lasting Power of Attorney. There is no equivalent provision for delegates appointed under Part 4, Article 24 of the 2016 Law.
9. Given the amount of the request, we adjourned the initial application which was made to the Delegations Court on a Friday morning for the Attorney General to set out his views on the application. We have received a skeleton argument from Advocate Kavanagh on behalf of the Attorney General for which we are grateful.
10. Advocate Kavanagh reminded us that in making a decision under the 2016 Law, the Court is guided by the core principles set out in Article 3. In particular, she emphasised Article 3(1)(c) which states that "An act done or a decision made on behalf of a person lacking capacity must be heard or made in the person's best interests".
11. It was clear from the medical evidence before us that A did not have capacity generally, and therefore she did not have capacity to understand the request being made by B and C as her delegates.
12. As to what is meant by best interests, guidance is given in Article 6 as follows:
"6 Best interests
(1) For the purposes of this Law, a determination as to what is in the best interests of a person lacking capacity -
(a) must not be made merely on the basis of -
(i) the person's age or appearance, or
(ii) any other aspect of his or her condition or behaviour;
(b) must not be made unless, so far as reasonably practicable, the person lacking capacity has been permitted, encouraged and supported to participate as fully as possible in any act done for or any decision affecting that person; and
(c) must consider all relevant circumstances, including in particular the matters set out in paragraphs (2) to (4).
(2) Such a determination must include consideration of whether it is likely that the person lacking capacity will at some time have capacity in relation to the matter in question, and if so, when that is likely to be.
(3) Such a determination must include consideration, so far as the following matters are reasonably ascertainable, of -
(a) the past and present wishes and feelings of the person lacking capacity as to the matter in question (including in particular any advance decision to refuse treatment or other written statement made by that person at a time when that person did not lack capacity);
(b) the beliefs and values of that person which would be likely to influence that person's decision if that person did not lack capacity;
(c) any other factors which that person would be likely to consider if that person did not lack capacity.
(4) Such a determination must take into account, if it is practicable and appropriate to consult the following persons, the views of -
(a) anyone named by the person lacking capacity as someone to be consulted on the matter in question or matters of that kind;
(b) anyone engaged in caring for that person or interested in that person's welfare;
(c) any person on whom authority is conferred under a lasting power of attorney granted by that person and applicable to the matter in question; and
(d) any delegate appointed by the Court under Part 4.
(5) A determination relating to life-sustaining treatment shall be not regarded as being in the best interests of a person lacking capacity if the determination is motivated by a desire to bring about that person's death.
(6) In the case of an act done or decision made under this Law by a person other than the Court, it is sufficient if (having complied with the requirements of paragraphs (1) to (5)) the person reasonably believes that the act or decision is in the best interests of the person lacking capacity on whose behalf the act is done or the decision is made."
13. The specific power we were being asked to exercise is found in Article 28 of the 2016 Law which includes the power in Article 28(1)(b) for the Court to exercise a power in relation to a patient's property to make dispositions.
14. Article 28(2) provides "The sale, exchange, charging, gift or other disposition of P's property may not be carried out except in compliance with any conditions or restrictions imposed by the Court on such sale, exchange".
15. In consequence of this provision (Article 28(2)), as in the present case, all delegates are told when they are appointed that they cannot sell, charge or otherwise dispose of a person's immovable estate without returning to the Court for the Court's consent. Article 28(3) makes it clear that only the Court and not a delegate may exercise power in relation to the settlement of P's property, whether for P's benefit or the benefit of others; the execution for P of a will; and the exercise of any power (including a power to consent) vested in P whether beneficially or as trustee or otherwise.
16. In relation to gifts proposed to be made out of P's movable estate, the Court had not previously imposed conditions or restrictions on such in this case. However, it is open to the Court to do so under Article 28(2) and while there is no express provision in the legislation, delegates are advised to seek the Court's permission to make a gift out of P's movable estate that fall outside of customary occasions even when there is no objection to such from P's close relatives/other court appointed delegates for P.
17. It may be sensible in future for delegates appointed by the Court under Article 24 to be given the same powers set out in Article 15 for attorneys acting under a lasting power of attorney when appointed so that they can make gifts on customary occasions so long as the delegate considers it to be in the best interests of the patient to do so. This to ensure certainty with the powers of a delegate in relation to gifts out of P's movable estate when the Court has not previously imposed conditions or restrictions relating to such.
18. The present application however was not the sort of gift made on customary occasions. Nor did the proposed gift fall within the power vested in a Court appointed delegate under Article 35(2) of the 2016 Law to provide for the maintenance or other benefit of a patient's family members where necessary or expedient to do so. Accordingly, we had to consider whether what was proposed was in the best interests of A and whether we should consent to what was proposed under Article 28.
19. Advocate Kavanagh, in relation to what is meant by best interests, referred us to the authorities of In the Matter of P [2019] JRC 002 which was applied by Deputy Bailiff MacRae In the Matter of D [2024] JRC 125 at paragraphs 24 to 28. These are the principles we have applied.
20. In this case we have been given examples of how A and her late husband provided financial support to the delegates and their grandchildren throughout their lives. Specific examples included (a) the payment of school fees for B's children, (b) payment of property work to B's home, (c) a deposit for C's first flat, (d) family holidays.
21. We were informed it was important for A and her late husband that family spent time together and we are satisfied that family were clearly important to A and her late husband.
22. In addition, as noted above, on A's death everything that the delegates now manage on A's behalf will pass to the delegates equally.
23. The Attorney General was also satisfied, and we agree, that on the material provided, A's current and future financial outgoings are fully covered by her income in the form of savings, rent, long-term benefits and pension.
24. B also explained to us that at present she was primarily responsible for managing A's properties. This was because she worked part-time and therefore could spend part of her time on the upkeep of the properties. However, due to a significant reduction in the income of B's husband, evidence of which was supplied to us, unless we were able to approve the gift, B was likely to have to take on a full-time role to meet the financial needs of her family and therefore she would not be able to look after the properties in the same way as she has to date. This would lead to management costs being incurred at A's expense.
25. B appeared before us in person, both at the initial delegation hearing and when we approved the gift made, and we were entirely satisfied that her explanation for the benefit of the gift which would allow her to continue to work on a part-time basis.
26. We were also satisfied that the amounts of the proposed gifts were not inconsistent with sums previously advanced when split between the four grandchildren. We were therefore satisfied that the sum requested was the sort of sum that A and her late husband would have advanced for the benefit of their grandchildren.
27. In relation to C, it is right to record that her financial position is different from B and she does not need the funds in order to support her children. However, we were satisfied that A and her husband would have wanted to have treated their grandchildren equally given the importance of family to them. We were therefore satisfied it was appropriate to sanction the gift in the way requested.
28. In reaching this decision, Advocate Kavanagh helpfully provided an analysis of the arguments for and against the making of the proposed gifts from A's estate as follows:
In favour |
Against |
The recipients of the proposed gift are those whom A has chosen to benefit in the will she made when she had capacity to do so |
The proposed gift reduces A's estate and the funds available to her during her lifetime. |
There is evidence that A and her late Husband made gifts to the Delegates when A had capacity. |
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On the information available, the gift will have no discernible impact on A's ability to meet her needs from her remaining funds and future income. The Delegates identify that A will not be adversely affected by making the gift as her current and future financial needs are covered through Long-term care, her pension and part of the rental income from both properties. |
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The proposed gift reflects the Delegate's parents' wishes, set out in the late husband's will, and in line with the support that he and A had previously provided the Delegates. |
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The Delegates seek one third of the overall fund held with Canaccord Genuity Wealth Management. While the fund fluctuates daily, as of 18 September 2024, the value of the fund was £319,850 therefore, £213,000 approximately would be left over should the gift be made. The fund will continue to grow under Canaccord's management, and the balance will be topped up with the balance of the rental income received. The Delegates submit that there is no need for withdrawals from this fund to support A's care given her current and future financial needs are covered by her long-term care plan, pension and rental income. |
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The primary management of A's properties is currently undertaken by B, with C's support. B works part time and can therefore dedicate her time to the upkeep of the properties. Should B have to take on a full-time role to meet the financial needs of her family, it may be necessary to hire a handy man or estate agent to oversee the properties reducing the overall value of A's estate. |
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The proposed gift reflects an agreement reached between the Delegates, there does not appear to be any indication from anyone else involved in the care of A or interested in her welfare that takes a contrary view. |
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29. In addition to this table, we felt it was in the best interests of A that her grandchildren were treated equally as noted at paragraph 25 above.
30. We accepted that by reaching these conclusions that there is an element of the Court having to consider preferences and likely preferences of A as noted in In the Matter of D. While we have sought to be careful not to apply a test of substituted judgment, we have looked at the past actions of A and when she and her late husband acting together have supported their family in order to satisfy ourselves whether the requested gift was in A's best interests. As can be seen from the table set out above and the other matters discussed in this judgment, we were satisfied that the best interests test was met.
31. By reference to Article 28(2) of the 2016 Law, and the powers vested in the Court we imposed as a condition of granting our approval that each delegate, at the same time as they file their annual report to the Capacity and Delegation section, should also explain how the funds we sanctioned to be advanced had been spent to ensure that the funds were spent in accordance with the information put before us. If there were any concerns on the part of the Capacity and Delegation section, these could be raised with the Royal Court.
32. We also directed that the funds to be advanced should be kept separate from any other funds of B and C and should not be intermingled in any other bank accounts or investments B or C might hold.
33. Finally, we confirmed that the costs of the application should be paid out of funds held for A.
Authorities
Capacity and Self-Determination Law 2016.
In the Matter of P [2019] JRC 002.